Who Pays Her Mortgage After Elderly Relative Dies?

Q: An elderly relative is very ill and may die soon. If that happens, must her mortgage be paid according to the current schedule, or can payments be postponed until the estate is settled? I'm concerned because no one else in the family has the money to pay the mortgage, and we don't want the bank to foreclose.

A: It's possible payments may be postponed, but that's not automatic upon the death of the mortgage holder. "Typically the people who will inherit the home will make the mortgage payments," says Dennis Day, vice president and area manager of Seafirst Bank. "But in cases where there isn't the wherewithal to make those payments, we encourage them (the executor or if no executor has been named, a relative) to contact the loan servicer."

Day says many servicers will grant what's called "forbearance," meaning foreclosure won't take place because payments will be postponed for an agreed upon amount of time, in this case until the property has been sold. If the loan servicer isn't willing to grant forbearance, then heirs should search out other ways of paying the mortgage, such as taking out a loan or paying with a credit card - with the understanding, of course, that the relative doing the lending will get that money back (plus any interest paid) when the estate is settled. To make sure that there are no misunderstandings about how this will work, it might be wise to put it in writing and have family members initial it.

Q: We live in Eugene, Ore., and will move to the Seattle area, probably on the Eastside, if my husband gets one of the jobs he's interviewing for now. We'd like to buy a house before the move because we realize prices are going up and we'd also like to be settled by the time school starts. Is it possible to make an offer subject to his getting a job? We don't want to lose any earnest money.

A: "It's certainly possible to make an offer," says Chuck Metzger, managing broker of Windermere Issaquah. "The question is, will the seller accept it? In our current market that might be a little difficult." He says you can improve your chances by getting preapproved for your loan, which lenders are usually willing to do - with the proviso you'll get a job with a salary to support the amount you intend to borrow.

Metzger says that if a seller does agree to your deal, there will be contingencies. On your part the deal must be contingent on your husband getting a job. If you don't put that in writing, and don't close the deal, the seller can keep your earnest money. On the seller's part, you're likely to encounter a bump clause - meaning that if the seller gets a better offer you'll have a short amount of time to either go ahead with the deal regardless of your job situation or walk away and let the other buyer have the house.

He also suggests you speed up your search by laying your groundwork from Eugene. Shop homes on the Internet (Windermere, as well as other local firms, have Web sites that allow you to see what's for sale by area). Start working with a local agent. Get a real estate firm's relocation package; it will have information on schools and communities, which will help you focus your home search when you arrive to shop.

Q: We recently signed a purchase-and-sale agreement to buy a home. It stated closing would be "on or before" a certain date. We've decided we'd like it to be before that date by about a week, but we're anticipating that the current owners won't want to close early. How much say do we really have in this matter?

A: Ardis Maine, 1997 president of the Escrow Association of Washington, says it's the buyer and seller, not the escrow company, who have the most influence over the closing date. Changing it "has to be an agreement between the two parties, so if the seller is unwilling to do it a week early, they're kind of stuck." Your best bet is to route your request through the real estate agents involved in your transaction.