Refinancing an inherited home

• Keep the existing loan and make the payments
• Refinance into your own name for a new rate or term
• Use a cash-out refinance to buy out other heirs
• Sell the home and pay off the loan from the proceeds

Many mortgages include a clause that lets the lender demand full payment if the home changes hands. Federal law limits that when a home passes to a relative after the borrower's death. In many cases, an heir who inherits the home can keep the existing loan and continue the payments.

Contact the servicer early, share the death certificate and your proof of inheritance, and ask to be recognized as the successor. Keep the payments current while you decide what to do.

Before you can refinance, the home usually needs to be in your name. That may mean finishing probate or another estate process, depending on how the property was held and local law. The executor or an estate attorney can tell you what's needed and how long it may take.

While the estate is being settled, keep the home insured and the property taxes paid. Gaps in either can create problems that are harder to fix later.

• Buying out siblings or other heirs who want their share in cash
• Getting a lower rate than the existing loan
• Taking the loan fully into your own name
• Changing the term to fit your budget

If you want to keep the home and others want to be paid, a cash-out refinance can fund the buyout. Agree on the home's value and each person's share in writing first. Some loan programs treat an inherited-home buyout differently from a standard cash-out, which can help with waiting periods. Ask your loan consultant how it applies to you.

Inherited homes often get a stepped-up tax basis, which can lower the tax if you sell later. The rules depend on your situation, so talk with a tax professional before deciding.

CapCenter refinances come with ZERO Closing Costs (restrictions apply). You need a credit score of at least 620 for a CapCenter loan.