Debts take joy out of real estate inheritance

Loans, liens, little equity cause some to decline property

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DEAR BOB: Is it true when someone inherits real estate, which was the deceased's primary residence, the mortgage will be wiped out at the time of death and the property title passes free and clear of all liens? I heard if the property was not the deceased's principal residence, then the heir has to pay the debts --Rick S. DEAR RICK: Dream on, my friend! When you inherit real estate, you receive title "subject to" all existing recorded liens and encumbrances against the property. Purchase Bob Bruss reports online. That means if you inherit a house that has a first mortgage, a home equity loan, a mechanics' lien and unpaid property taxes, you must pay all those obligations according to their terms or lose the property by foreclosure or forfeiture. Real estate inheritances can be wonderful if there is plenty of equity (the difference between the total amount owed and the fair market value of the property). However, if there is little or no equity in the inherited property, you might want ...