My mom has added me to her will to take over the deed to her house. She has a home equity loan on the house and I was wondering when she passes away will the bank demand full payment on the loan. What happens in most cases where someone is on a will and there a mortgage or loan on the home and that person passes away do most bank transfer the mortgage or loan to the person who the house was deeded to or do they demand payment in full.

do they demand payment in full.Hello far:

Yup.

excon

The bank will demand payment on the loan. However, you may be able to take out a new mortgage in your name (once you inhert the house) to cover it. Obviously if this is not going to be your primary residence or a vacation home for you it may make more sense to just sell the house.

If you are worried that a bank won't give you a loan, you should start a savings account now, that matches what she owes, so that you can pay it off and own free and clear. She should owe less than the house is worth, but keep an eye on the value of the house and her loan. See if she is timely with property taxes/water/sewer/fire depending on where you are, since unpaid taxes will be taken by the town before you get the house. It isn't rude to sit down with her and go over all this now. You could help her too if there is a senior discount according to income in her town. Some elderly don't even know.