What is the name of your state (only U.S. law)? Maryland
My mother passed in 2008 and named my brother and myself the beneficiaries of a trust that consisted of mainly the house we grew up and still live in (with 10 years of the mortgage left) and the cash from her life insurance, which was used to make the mortgage payments.
Late in 2012 the cash in the trust was exhausted and the responsibility of making the monthly payments fell to my brother and me. Since my brother and I are making the mortgage payments, we were advised to investigate refinancing/purchasing the house into our own names so we can benefit from the tax deduction that comes with having a mortgage. On the surface this seemed like a prudent idea, however, I am reluctant to take that step because I am worried the house might actually be worth less than the amount left on the mortgage because of water, foundation, and other concerns.
The way I understand it, the house is not currently directly owned by my brother and me, but instead by the trust. Since the Trust owns the house, if the mortgage were to be defaulted on, would my brother and my credit be adversely affected, or would that fall on the trust?
In theory could we continue to make mortgage payments on the house for an indefinite period of time, see if my concerns are verified that the value is too low to salvage, let the house foreclose, and let the trust/estate take the credit hit?
I understand that if not illegal, it is probably unethical in some way, but I need to know what options I have before I commit to something I’d later regret.
Thank you for the help.
My mother passed in 2008 and named my brother and myself the beneficiaries of a trust that consisted of mainly the house we grew up and still live in (with 10 years of the mortgage left) and the cash from her life insurance, which was used to make the mortgage payments.
Late in 2012 the cash in the trust was exhausted and the responsibility of making the monthly payments fell to my brother and me. Since my brother and I are making the mortgage payments, we were advised to investigate refinancing/purchasing the house into our own names so we can benefit from the tax deduction that comes with having a mortgage. On the surface this seemed like a prudent idea, however, I am reluctant to take that step because I am worried the house might actually be worth less than the amount left on the mortgage because of water, foundation, and other concerns.
The way I understand it, the house is not currently directly owned by my brother and me, but instead by the trust. Since the Trust owns the house, if the mortgage were to be defaulted on, would my brother and my credit be adversely affected, or would that fall on the trust?
In theory could we continue to make mortgage payments on the house for an indefinite period of time, see if my concerns are verified that the value is too low to salvage, let the house foreclose, and let the trust/estate take the credit hit?
I understand that if not illegal, it is probably unethical in some way, but I need to know what options I have before I commit to something I’d later regret.
Thank you for the help.