How can I take over Grandma's mortgage if I have a credit issue?

1 answer | Last updated: Oct 27, 2016
Mischuck080808 asked...

We moved in with my grandma to care for her 7 months ago when the doctor said she could no longer live alone. She is still paying a mortgage on her house. She wants us to have it when she passes but due to some credit issues I am unable to finance it. We live in Illinois, can you tell me what will happen if she passes away before I can get my credit in order to purchase the home from her?

Expert Answers

Barbara Repa, a senior editor, is an attorney, a journalist specializing in aging issues, and the author of Your Rights in the Workplace (Nolo), now in its 10th edition.

You are wise to be thinking and planning ahead in this situation.

Hard to give definitive advice here, unfortunately, without knowing more about how much remains to be paid on the home, how title is held, and whether your grandmother has specific estate planning documents in effect.

But the hard bottom line is that the mortgage passes along with the mortgaged property"”and the new owners must ultimately find a way to pay off that debt. And if your grandmother has voiced a preference that you next own the house, but has not taken tangible steps to ensure that wish"”such as transferring it to joint ownership or leaving it to you by will or trust, then you will have no legal standing to take it next, with or without unresolved credit issues.

Take heart: There are some very creative and forgiving approaches being applied to clearing credit records these days, but you may already be in the best position to know whether you qualify for any of them.

While you surely must have your hands full with caretaking duties"”and all the demands on time and psyche that involves"”if your grandmother's house is important to you, it would be well worth your time and effort to consult an experienced real estate lawyer or financial planner who could eyeball the documents and evaluate the realities involved.