“What Affect does a Life Estate have when doing a Mortgage?”

When I’m doing a refinance for anyone, one of the questions I ask is: Are there any liens or attachments on title? In the refinance process that I was doing for Judi, I asked all the questions and she answered there were no liens.

The attorney had a title search done and a life estate to her parents was revealed. This life estate means that the parents retained life use of the property until they died. The life estate is the same as a lien against the property and no refinance can be done until it is released.

As it turned out the father had passed away a couple of years ago and the mother was in a nursing home and was not competent. This created a problem as the mother has to release her right to occupy the property, which normally wouldn’t be an issue, but she wasn’t competent to sign this document.

We had to make arrangements for a conservator to be appointed through the courts. All was finally accomplished, but delayed over a month.