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Losing a spouse is an incredibly difficult experience, both emotionally and practically. One major financial change many widows face is taking on a mortgage alone. If your name was not on the original mortgage, this can be a daunting process full of unfamiliar terminology and requirements.
This article will walk through the key things widows need to know about taking over and paying a mortgage, as well as qualifying for new home loans. We’ll cover:
- Options for paying an existing mortgage
- Qualifying for VA home loans
- Qualifying for conventional loans
- Refinancing considerations
- Tips for managing homeownership solo
Paying the Remaining Mortgage Solo
If your spouse passed away and you now need to pay the mortgage alone, you have a few options:
Continue making payments. If the mortgage was in both your names you are now solely responsible for making the monthly payments. Failure to do so can lead to foreclosure.
Pay off the balance. If your spouse had assets or life insurance that cover the remaining mortgage balance, you may be able to pay it off entirely.
Assume the mortgage, You can formally assume the mortgage and become the sole borrower Your lender transfers legal responsibility to you,
Sell the home. If keeping up with payments is not feasible, you may need to sell the house. Using the equity to pay off the mortgage balance.
No matter what, communicate with your lender to ensure the mortgage gets formally transferred to you. Provide any necessary documentation proving the passing of your spouse.
Qualifying for a VA Home Loan as a Widow
If you are the surviving spouse of a veteran, VA home loans can be an excellent mortgage option. VA loans come with zero down payment requirements, lower interest rates, and expanded credit guidelines.
Here are key steps for qualifying as a widow:
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Confirm your eligibility. You must be the unmarried surviving spouse of a veteran who died in service, from a service-connected disability, or in certain other cases.
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Apply for a Certificate of Eligibility (COE) This certifies to lenders that you qualify for VA loan benefits You can apply online through the VA website,
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Find a VA-approved lender. Research lenders familiar with VA loans. VA.gov has a lender search tool.
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Complete the mortgage application. Provide all required documents including the COE, financial information, and details on the property.
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Get the property appraised. The lender will order a VA appraisal. You are not required to cover the costs.
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Close on your VA mortgage! After final approval, you can close on the home loan.
VA loans offer excellent financing options for eligible widows. Be sure to research the full eligibility and application process.
Qualifying for Conventional Mortgages as a Widow
If you do not qualify for a VA home loan, conventional mortgages are another option for widows looking to buy a home. Here is how to qualify:
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Review lender requirements. Each conventional lender will have their own credit score, income, and down payment requirements. Shop around for your best fit.
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Document your finances. You will need W-2s, tax returns, bank statements, investment account info, and other documents to verify your finances.
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Check your credit. Getting copies of your credit report ahead of time allows you to check for errors and understand your credit standing.
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Consider down payment assistance. If you lack funds for a down payment, there are mortgage programs that offer down payment assistance for borrowers below certain income limits.
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Connect with a real estate agent. Agents can help you identify an affordable mortgage product and lend their expertise during the buying process.
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Complete the mortgage application. Be responsive to lender requests and make sure you submit all required paperwork.
Preparing in advance by learning guidelines, documenting your finances, and improving your credit score will help widows get approved for conventional home loans.
Should You Refinance? Factors to Consider
If the mortgage is now just in your name, you may be able to reduce monthly payments by refinancing.
Here are some key considerations for widows weighing a mortgage refinance:
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Interest rates. If rates have dropped significantly since you took out the original mortgage, refinancing can lower your rate and payment.
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Your financial situation. Evaluate if refinancing improves affordability based on your current income and debts.
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Upfront costs. Closing costs for refinances can reach thousands. Make sure savings justify costs.
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Mortgage term. You can often refinance into a longer term, reducing payments but increasing total interest paid.
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Cash-out refinance. This converts home equity into cash, but results in higher loan balances and payments. Only do this if absolutely needed.
Consult with your lender to crunch the numbers and see if there is benefit to refinancing your mortgage as a widow.
Tips for Managing Home Finances Solo
Owning and managing a home on your own can be daunting after losing a spouse. Here are some tips:
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Set up insurance. Make sure policies are affordable and provide enough coverage for your situation. Review annually.
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Create a homeowners budget. Track all your home expenses and plan for regular maintenance, repairs, and utility payments.
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Build an emergency fund. Have cash reserves for surprises like appliance repairs or temporary income loss. Aim for 3-6 months’ worth.
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Consider downsizing. If the mortgage payment and home upkeep exceed your budget, you may need to downsize to a smaller living space.
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Outsource help. If home maintenance is a weak spot, create a list of trusted contractors and handymen to call for help.
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Automate payments. Set up automatic monthly payments on your mortgage and utilities to avoid late fees.
Owning a home alone has challenges, but being organized and budgeting wisely will help widows successfully manage finances and avoid pitfalls.
Finding Support on the Road to Homeownership
The journey to homeownership can feel lonely after the loss of a spouse who may have previously handled mortgage matters. Here are some resources and organizations that can provide support:
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HUD-approved housing counseling agencies – Nonprofits that provide free mortgage readiness and prepurchase counseling.
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Therapists – Talking through concerns and challenges with a therapist experienced in grief can help.
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Mortgage lenders – Many larger lenders have dedicated teams familiar with the needs of widows and surviving spouses.
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Real estate agents – Compassionate agents can provide hand holding for navigating the buying or selling process.
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Family and friends – People who have experienced your loss with you can provide emotional support and encouragement.
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Support groups for widows – Connecting with other widows provides solidarity. Groups like Widow to Widow or Modern Widows Club have chapters across the U.S.
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Financial advisors – Advisors can look at your full financial picture and help create a solid financial plan as a widow.
While the logistics of paying a mortgage solo or buying a new home as a widow can feel overwhelming, know there are resources to help guide you. Seeking out expertise and support can provide peace of mind each step of the way.
Key Takeaways on Mortgages for Widows
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Communicate with your lender to formally take over an existing mortgage. Be aware of payment responsibilities.
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Research whether you qualify for a VA home loan based on your late spouse’s military service.
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Shop conventional lenders willing to approve widows, and prepare your financial documentation.
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Refinancing could make sense if interest rates are lower now. Do the math.
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Create a budget, build emergency savings, and outsource help to smoothly manage homeownership solo.
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Don’t go it alone. Seek financial guidance and emotional support from professionals and trusted loved ones.
Losing a partner is incredibly hard. While the road to homeownership may seem rocky at first, know that the options and resources are out there to help widows achieve financial stability and success. With careful planning, budgeting, and support, you can navigate mortgage financing and comfortably manage home costs on your own.
Finding Financial Help for Widows
Widows looking for financial help and free money should start with the basics. Don’t limit yourself to help that’s targeted for widows. Take your financial situation into account and research anything that can make it better, from government benefits to nonprofit debt management. Know the restrictions of programs as well. Some, particularly those for veterans’ spouses, end if you marry again.
Top sources of continuing financial help for widows:
Social Security is the prime benefit available for widows. A surviving spouse can claim whichever is greater, their own benefit or the spouse’s. Because men earn more over a longer period, their benefit often is higher.
If your spouse was still working, check with the employer’s Human Resources department to find out if there was a 401(k) account, life insurance, health savings account or other benefit. HR departments may not contact you if there’s a benefit available, so it’s important to check.
The Department of Veterans Affairs has many benefits for surviving spouses and dependents of veterans. Some have income qualifications or other restrictions. To get a start, visit va.gov/family-member-benefits.
About Debt Help for Widows
Losing a spouse can turn your life upside down. Aside from grief, a major challenge is loss of income. There are many places widows can find financial help – government and nonprofit – including “free money.”
There were more than 11.6 widows in the U.S. in 2021, according to the U.S. Census (there were about 3.5 million widowers), with the median age just under 60. Many of those who’ve lost their partner struggle to pay the bills.
The poverty rate for women-headed households – whether widowed, divorced or single – was 23.4%, as opposed to 11.4% for men. Women more frequently have a lower average income and much higher likelihood of having children to care of.
The financial issues are compounded for widows, many of whom lose much of their income when they lose their spouse. Household income for widows declined an average 37% when their spouse died. Men lose an average 22%. Women of color and those over 65 suffer an even bigger financial impact from widowhood and are more likely to fall below the poverty line.
“Life can suddenly get very expensive,” said Larry Kotlikoff, author of “Get What’s Yours – the Secrets of Maxing Out Your Social Security Benefits.” .
“The surviving spouse has to deal with electricity, food, cars, maintenance and all the other day-to-day living expenses that don’t change, but they’ve only got one income to throw at it.”
There are options, though, that can help widows with financial challenges.
VA Loans For Surviving Spouses Finally Explained
FAQ
What if my husband died and I’m not on the mortgage?
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How to get money as a widow?
Does a widow qualify for a VA loan?