Inherited Home

[Philip Linton]

My wife and I recently inherited a 1200 square feet home. the home was built six years ago by Habitat for Humanity for my wife's sister and her husband who were both disabled and have both passed away. The house was left to my wife. It appraised for $110,000 there is a $40,900 balance on the mortgage with a $36,300 "Forgivable Loan" from the Federal Government.

There are no outstanding bills so probate is not a problem.

I am told that since the Mortgage was not paid off before they both passed, the "Forgivable Loan" is now due. So with a total of $77,200 needing to be refinanced, we are undecided what to do with the home.

Should we sell the house? refinance it and rent it? Any suggestions? The mortgage payment after refinancing could be as much as comp rentals, which is around $700/month. 

Any feedback would be greatly appreciated.