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Can you borrow against a life estate?
If your property is owned by a life estate, you can still borrow against the property. However, you may face additional hurdles at the lender. If you do obtain a home equity loan and default, not only can the lender try to settle the loan from the property, but it can also try to collect from the remainder owner.
Can you refinance a house with a life estate?
A life estate lets you have your house and give it away too. In life-estate speak, the person you give title to is known as the “remainderman.” A life estate doesn’t prevent you from refinancing or taking out a home equity loan, but you’ll need the remainderman’s go-ahead.
Can a person with a life estate rent the property to?
In most places a person who holds a life estate (the life tenant), has the right to do anything with the property that a full owner could do during his or her life. He or she need not live in the property and use it as his or her home, but can rent it out full or part time or even sell the life interest in the property.
What happens to property when last life tenant dies?
Upon the death of the last Life Tenant Owner the property automatically belongs to the Remainder Owner (s), without any requirement of Probate for the real estate. This is extremely advantageous (especially where there is little or no other probate property).
Do you have to pay real estate taxes as a life tenant?
The Life Tenant can be one individual or there can be joint Life Tenants. The Life Tenant remains responsible for real estate taxes, insurance, and ordinary maintenance costs related to the property and is still eligible for real estate tax abatements & exemptions.
How does a life estate work in real estate?
With a Life Estate form of ownership of real estate there are two separate categories of owners of the property: The Lifetime Owner of the property has absolute and exclusive right to use of the property during their lifetime, which expires automatically upon the death of the last to die of the Life Tenant (s).