1. Home
  2. Blog
  3. Mortgage Basics
  4. What Happens to a Mortgage When the Borrower Dies?
New Home in a Couldesac

Preparing financially and legally for your own death probably isn’t the most uplifting activity, but nonetheless, it’s an important task, especially if you have a spouse or dependents you want cared for when you’re gone.

Some of the most common considerations revolve around the process of designating a successor for the title of your home and making plans for what will happen with your mortgage upon your passing.

Because each state has different rules on how title transfers, either by will or probate, it’s important to talk to an attorney and determine your state’s laws and what you need to do based on the way you want your successor to hold title.

Who Assumes the Payment?

There are a few different people who could possibly inherit your title, depending on who you indicated in a legal will: a spouse (co-borrower), a co-signer or a designated beneficiary.

Should you have a surviving spouse, federal law allows them to take over the mortgage, rather than paying the full balance back to the mortgage company, assuming they’re able to provide proof of financial ability and credit-worthiness.

Should you leave your title to a successor, it’s important to remember that this individual only inherits the title of your home, not the mortgage. Until the inheritor goes through the assumption process, there is no personal obligation on that individual to make the loan payments. In other words, that individual’s credit isn’t linked to the payments needed to make the loan, so they aren’t legally bound to pay the existing loan amount.

The Difference Between an Heir and the Executor of an Estate

It should be noted that there’s a difference between an heir and the executor of an estate, because only one has the authority to make final decisions on an estate.

The heirs are those who may receive money under the will, but they don’t have power over the estate or the sale of assets. Usually these individuals are family members or someone the client had listed as beneficiaries in a will.

An executor is designated to administer the estate and make sure all claims are paid and that the remaining property goes to the heirs. Because of the power an executor holds, an executor can consult with heirs regarding the estate or sale of assets but isn’t obligated to do so. The executor has the ultimate authority to make final decisions concerning the estate.

Oftentimes when there is a larger family concerned, one heir, or a dependent of the client, will be made the executor, while any other dependents remain heirs. Should there be a dispute between the executor and heir(s), a judge can make a final decision on the estate.

The executor can choose whether to pay off the remaining mortgage balance by selling the home, dividing the money from the sale between the heirs, resuming payment of the loan in the deceased individual’s name, or refinance the mortgage into their own name.

Who Has Authority?

Perhaps the most important thing you need to do when making your plans is to get everything in writing.

By establishing a clear-cut will, you’ll ensure your home will pass to your designated relative or heir and that you have a designated executor who can be the ultimate decision maker. However, the decision maker still isn’t liable for the loan until they go through the assumption process.

For this reason, communication is key when determining who will become the executor of your estate. Be sure to have an open and honest conversation with your heir or beneficiary and to make your intentions known. It’s also helpful to make sure they know where and how to find your mortgage documentation.

Depending on what state you’re in, the inheritor may need to go to court for probate to ensure they’re appointed as the executor and have the right to make decisions on the estate.

Only one person can be named the executor. So if a deceased family member had multiple dependents or beneficiaries and no designated executor, the courts will try to ensure that each person is represented when considering the estate.

What Are the Options?

If upon your passing, no one has been designated to inherit the loan and no one pays, the lender will still need to collect the debt. Therefore, the lender usually ends up selling the home to recoup the debt. This means if someone intends to keep the home, they must continue to pay the mortgage.

It’s important to note that lenders don’t automatically require full repayment of the loan or initiate foreclosure upon a client’s passing. The client’s family is more than welcome to send in payments to keep the loan current and in good status.

The best thing to do upon the death of a family member is to first contact the servicer of the loan. Servicers typically require a death certificate and verification that you’re the inheritor of the house.

Talk to a Home Loan Expert Today

Quicken Loans offers various options to clients’ family members when they inherit a home.

For example, if a client dies and someone wants to pay the loan but doesn’t have the ability to do so, Quicken Loans can often offer loss mitigation modification options, completed in conjunction with an assumption, to put the loan in the heir’s name while working to make the payment more affordable to the heir.

Assumption options are also available to heirs who want to pay the loan’s current payment and have that payment reflected on their credit.

To elaborate, if the heirs want to assume the loan so that the payments they make will appear on their credit, they are entitled to do so without becoming financially responsible for the loan. Until an assumption takes place, no one is responsible to make payments on the home in the eyes of the lender or the credit bureaus. If a payment isn’t made, the home will go into default, and foreclosure could begin.

Talk It Out

There are a lot of factors that go into these types of preparations. It’s important to consider how your decisions today will affect your loved ones when you’re gone.

On top of your mortgage, consider any other debts that you may leave behind for your family upon your passing. Your own death often isn’t the most uplifting discussion topic, but talking about it now may give you and your loved ones some peace of mind in the future. So take a moment and consider what happens to your debts when you die and make time to openly and clearly explain your situation to your family members.

This Post Has 117 Comments

  1. A good friend of mine mother passed away and there is no will and she has a loan on the home and the houses in Probate right now.. his sister is in the home and she has not paid anything on the mortgage.. She thinks she doesn’t have too and the house is all hers when there is 3 adult children live.. Thanks and please let me know on what to do

    1. Hi Betty Jean:

      Unfortunately, that’s not true. As long as the mortgage isn’t paid off, there’s a lien on the house that gives the lender the right to repossess it. I would advise her to contact the mortgage company and start making payments.

  2. My mom Passed last monrh, i am on deed Rights of servivorship but not on loan at bank. Can bank make me refinance? Or can i continue to pay loan off i have been paying .

    1. Hi Connie:

      The bank won’t make you refinance. You can continue paying on the loan. I’m sorry to hear about your mother. Hope this helps!

  3. My dad passed away, and he and his girlfriend had the mortgage in both their names. They had a mortgage that if either passed away it would be left to the other. So my question is do you have to pay a inheritance tax in the house since it automatically went into her name?

    1. Hi Lynn:

      Sorry to hear about your father. That has nothing to do with the mortgage and more to do with the title. I don’t know, but I assume the way they did this is that while they were living, both of their names were on the title. Therefore, if one of them passed away and it went solely into the other person’s name, you wouldn’t be inheriting what you already had. Now, when there are two names on the title, you’re getting that person’s 50% interest in the home when they pass. I would talk to an estate attorney as to whether you would pay tax on that, because we really don’t give tax advice as every situation is different. But that’s not really to do with the mortgage.

  4. I am in the process of refinancing on my house. I had a co-borrower who suddenly left and has since died 7 years ago. Right from the start, I was the only one paying for the loan and related expenses like taxes, home improvements, etc. Basically abandoning all responsibility altogether. Why is QL asking for a Probate? Isn’t refinancing supposed to take the co-borrower from the mortgage?

    1. Hi Charles:

      Refinancing the mortgage doesn’t remove the person from the deed. I’m going to have someone from our Client Relations team reach out about this.

  5. MY HUSBAND RECENTLY PASSED
    WE HAD AN FHA LOAN AT 3% SO PAYMENTS ARE ALREADY TO THE LOWEST WITH FHA
    MY QUESTION IS I WAS NOT ON THE LOAN JUST THE DEED AS HIS WIFE
    DO I NEED TO ALERT THE MORTGAGE COMAPANY ?
    I HAVE NOT BECAUSE I DON’T WANT TO MOVE
    I HAVE BEEN MAKING THE PAYMENTS SINCE HE PASSED
    AND I DONT THINK HE HAD COVERAGE INCASE SOMETHING HAPPENED
    IM AFRAID IF I ASK IF HE DID THEY WILL KNOW HE PASSED AND MAKE ME MOVE?

    I LIVE IN MICHIGAN
    IS THERE A TIME LIMIT ON WHEN I HAVE TO REPORT HIM DECEASED?
    AND IF HE DID HAVE AN INSURANCE CLAUSE WHEN THEY FIND OUT WILL THEY HAVE TO REIMBURST ME THE MONIES THAT WAS PAID SINCE HE PASSED?

    1. I’m sorry to hear about the passing of your husband.

      If you’re on the deed and you keep making the payments, they won’t take your house away. As a practical matter, the mortgage company doesn’t care who makes the payments as long as they get made.

      From a financial standpoint, there’s no downside to notifying them. If you were able to qualify to assume the loan, which is something they could go over with you, you would then have the option to refinance down the line if you ever chose to take cash out or something.

      As to the insurance question, if he had mortgage life insurance, that wouldn’t come from the mortgage company, but your insurance provider. Look at any insurance policies he may have had and that would be your start. I hope this helps!

  6. Mother passed 3 years ago and left a home with a small 20,000 mortgage with 2 sisters on the deed ,while one sister 1 which is married and is living in and assuming the loan ,with financial problems and employment problems always layed off and other sister #2 has home of her own ,has full time employment ,and financial stable and not intersted in living in mothers home although if home sells the #2 sister would want her half of the home but no hurry to sell or buy out from other sister #1 NOW the #1 sister that living in mother’s home wants to borrow on the home equity to do repairs and wants to have the other #2 sister take name off deed so they the husband and other #1 sister can borrow on the home and #2 sister doesn’t want to assume loan or be responsible for a home equity loan that they may fault on due to loss of employment due to the nature of his job and other sister that won’t work ,what do I do I don’t want to take name off deed and lose interest in my mother’s home and let them attempt to take a loan and maybe default or sign off my rights to the home let them take it as of now they think I am holding them up on their borrowing business and mad at me for it and call me selfish for not takin my name off since the husband is making the $280 payment and the home is more than 3/4 paid and I don’t want to lose home for their problem but again I don’t want to assume no loan either as my husband has just retired and we don’t want any more loans and of it was me I would sell it and split with her but she wants to live in it and thinks I should not have been added to the deed HELP please anyone what do I do

    1. Hi Tammie:

      That is a difficult situation. I think the bottom line here is that one way or another, you all need to make a decision on who’s going to take ultimate responsibility for this home and then let that person maybe deal with it. If you were to sign a quitclaim & sign it over to the sister that’s actually living there, there is a way to get paid a consideration for your interest in the property. It probably wouldn’t be as much is if the split it when you sold it, but you would no longer have any responsibility for the house or any of the loans. Both sisters can do that and at least get something, because it doesn’t sound like the sister that’s actually living there wants to sell and because you’re all on the deed, you would all have to agree. It’s a hard conversation, but I think the only way to do this would be to try and get in a room and hash it out. Otherwise, all three of you are on the deed and everybody is unhappy for one reason or another. Maybe a family financial counselor could help you.

  7. My mom passed away and I’ve continued to make the mortgage payments on her house. If I notify the mortgage company of her death and try to assume the loan but get denied, is there anything they can do to absolutely force me out of the house (assuming that I keep paying the mortgage on time)? Or is it better to stay quiet and just continue to pay it?

    1. Hi Ally:

      If you pay the mortgage on time, they won’t kick you out even if they deny the assumption. They don’t care where it comes from as long as they get the money.

  8. I inherited my current residence from my mother, currently the deed is in my name but the mortgage is still in the Estate of my mother. I have been back and forth with the mortgage servicer, tried to assume to loan, home fell in foreclosure and possible sheriff sale. I want to keep my home, but the loan does not belong to me, I would like some assistance in getting a new mortgage servicer as I would be considered a first time homebuyer, any assistance is greatly appreciated.

    1. Hi Jaime:

      You don’t have to assume the loan in order to make payments. The payments can always be made while you trying to assume the loan. The only thing assumption does for you is give you the ability to refinance. But once it falls into foreclosure, the lender or investor in the mortgage owns the property. The servicer is also up to the mortgage company. I wish I could give you better news.

      Thanks,
      Kevin

  9. Our parents passed away recently. I have 5 siblings, our brother lived with our parents for 15 years with his family of 4 children to help them pay the mortgage. When our parents got sick they transferred the title to our brother without consulting us. Two months before our mother passed she went to the lawyer with my brother to ask to include all the children on the deed of trust, Quit claim deed to be sign by my brother’s wife and the promissory note. Those documents still kept unsigned intentionally that he doesn’t want to share our parents property equally to his siblings. Our mother’s last wishes was to be equally divided fairly to all her children before she died. Please help. Thank you so much!

    1. Hi Lita:

      If the title was transferred to your brother, you may not be able to make that happen without him signing off. Unfortunately, in your situation, my only advice is to consult an estate planning attorney. Even if those were her wishes, she still has to have legal documentation to that effect and proof that the home was to be included in the trust.

      I’m sorry to hear about the passing of your parents. I hope this advice has at least been a little bit helpful.

      Thanks,
      Kevin Graham

  10. My father passed away a little more than 5 months ago. The home mortgage was in his name only, in his will the house is passing to my mother. Is it standard for her to have to pay fees to the lender ($550) to assume the loan?
    Thanks
    Rick Drennan

    1. Hi Rick:

      It’s hard for me to say what’s standard because all lenders have different policies. There are a certain amount of administrative costs when it comes to getting the paperwork switched over and they have to put time into checking qualifications.

      Alternatively, she doesn’t have to assume the loan at all. She could just keep making the payments and continue to live there. The only reason she would have to assume the loan is if she wanted to refinance it. Hope this helps!

      Thanks,
      Kevin Graham

  11. My mother recently passed away. I am the co-executor of her estate. She left her home to me in her will. She has a balance on the mortgage. I am making the payments. She has 8 years left to pay off the mortgage. I do not want to refinance or apply for another mortgage. Can I stay in the house and make the payments?

    1. The good news and the short answer is yes. However, if you ever want to take cash out, you would have to refinance. Hope that helps!

  12. My wife and i are looking to purchase a property. We are thinking of purchasing property under my wife’s name and have my name on the title. Can i take full ownership of the property if anything bad happen to my wife.

    1. If you’re on the title and your wife passes away, you can choose to assume the loan or just keep making the payments, but it’s your house. I hope this helps!

  13. My husband took out a second loan on the house years ago in his name only, and he passes away 3 years ago and my name is on the deed, can the mortgage company come after me or foreclose on the house?

    1. Hi Cathy:

      There’s a lien on your house until that debt is repaid. If you want to keep the house, you have to keep making the payments. I will say that if you don’t live in a community property state, the foreclosure wouldn’t affect your credit. That’s because the loan is only in his name.

      Thanks,
      Kevin Graham

  14. I am the co-borrow on the mortgage for my mom and her common law spouse. If he passes away, can his kids attempt to take the house away from us?

    1. Hi Alma:

      It depends on whether you’re on the title. If you’re not on the title, technically, you have no ownership stake in the house.

      Thanks,
      Kevin Graham

  15. My mother recently passed away with my step father being left their home an estate. My biological father was killed in a mine shortly after returning home from Vietnam when I was 8 months old, an my mother remarried when I was 11 months. When I turned 18 an started college I didn’t qualify for any help because my mother an step father were receiving benefits in my name for over 17 yrs. My step father has made his an my mother’s son beneficiary of his life ins but there is still a substantial amount of loan on the home that seemily was purchased with my benefits. When my step father passes do I have any right to the house? My name is not on the deed.

    1. I’m not sure about this. I would talk to an attorney if I were you and see if you have any rights. My suspicion is no, because you’re not on the title, but I don’t want to lead you in the wrong direction.

      Thanks,
      Kevin

  16. My parents both past 4 years ago.We thought brother had taken over.Then we find out there is still loan on property.He wont tell us where loan is at to take care of this.How do i find out where morgage is at to get taken care of.

    1. Hello, Rose. My name is Patrick, and I work on the Quicken Loans Zing Blog. I’m going to have one of our Home Loan Experts reach out to get some more information. Once we have a few more details, we can point you in the right direction!

  17. My parents bought a house in 1985 my father had passed away my mother is in nursing home the house was to be paid off upon one or both deaths the mortgage will mature this year I need to sell the house to pay for my mothers funeral and the rest go to nursing home what can I do

    1. Hi Yvonne:

      You sell the house and pay off the mortgage. The rest goes for the funeral and the nursing home. If your mother is in good enough shape, she can consent to this. If not, you may need power of attorney. If you don’t already have it, I would speak with someone that specializes in elder law. Hope this helps!

      Thanks,
      Kevin Graham

  18. Hi! My uncle just passed back in December. He had been sick for about 2 years and I moved in the house after he went to the nursing home and been paying the mortgage on the house since then. What is it that I need to do to keep the house? I haven’t made any payment in 2 months because I lost my job but I’m working on getting another job now but I need some information on can I keep paying notes with his name on it are what?

    1. Sorry to hear about your uncle. You can keep making the payment with his name on the loan because the lender isn’t going to care where the money comes from as long as the payment is being made. That being said, there are other reasons to want to notify the lender that you’re now making the payment. If you can get the loan in your name, you could work with the lender to get a mortgage modification to make the payment more affordable until you got your job straightened out. Unfortunately, the ideal time to notify them of that would have been just after he passed. You have to credit qualify and that may be harder to do now that you have no job. However, I would still contact the lender and talk to them about potential options.

      Thanks,
      Kevin Graham

  19. My brother passed almost 14 years ago. I lived with him at the time and just took over the loan and have made on time payments since his passing that have came out of my account. The deed was put into my name through the county i think it was. I talked to the mortgage lender 2 weeks after his passing and they told me if i can make the payments just keep doing it until i feel i can set down with them and talk about it, i have just never got around to doing it.
    Was just trying to get a little information on whether i am paying on a loan that is still in his name and am going to end up on the street when loan is payed off or what options i may have. thank you

    1. Hi William:

      The first thing I would do is verify that the deed is in your name. If the deed is in your name, it’s your property and you find as long as you keep making the payments. The one thing you might want to talk to the lender about is whether you can formally assume the loan. Being that you’ve made payments all these years, I’m assuming you can afford it and will qualify. If you can assume it, you would then have the ability to refinance if you wanted. Hope this helps!

      Thanks,
      Kevin Graham

  20. Hi my sister inherited our family summer home when our mom died because her name was on the deed. She later refinanced at a very large amount. The house is not hear worth that now . She had no will and no assets. Do I have any claims to the house. Did the debt go away when she died since the house deed was only in her name.

    1. Hi Karen:

      if I’m understanding you correctly, your sister passed after having inherited the home from your mother. I’m sorry for your loss.

      Unfortunately, the debt doesn’t just go away, but you have a few options. When the last person on the deed dies, the assets of the estate go through probate. Whoever ends up with the house has a couple of options. They can keep the house and continue to make the payments. You can continue to make the payments until you can sell the house. Finally, the last option is just to let the house go back to the lender. No one is responsible for the foreclosure in this case because you’re not on the mortgage at this point. You wouldn’t have to do anything with it. It might make things smoother if you let the lender know this is your intention and they’ll work with you.

      Thanks,
      Kevin

  21. My ex partner did not leave a will and passed away. His monies and assets went to his estate. Because I am still on the loan and deed does the estate, because it is a debt under his name, pay off the mortgage. It is my understanding that debts, including mortgage, is paid by estate.

    thanks.

    1. Hi Roland:

      If you’re a co-borrower and on the deed, the house passes to you as does responsibility for the payments. Depending on who gets his assets, you may be able to use that money to make the payments or pay it off.

      Thanks,
      Kevin

  22. I’m the co borrower on the mortgage as well as owner of the house. If the primary borrower dies does the mortgage just revert to me and I just continue paying it, or are there special procedures to follow?

    1. Hi Jennifer:

      It’s good practice to let the lender know that your co-borrower has passed. This helps with paperwork corrections and they can work to take their name off any documents. With that being said, you would be able to continue making payments.

      Thanks,
      Kevin

    1. Hi Clemen:

      There’s no insurance that makes payments in the event of your passing that comes with the mortgage. You can have it covered by your life insurance policy or buy special mortgage life insurance. We don’t sell that, but there are companies that do. Hope this helps!

      Thanks,
      Kevin Graham

  23. I am the executor and sole heir of a friends estate. I am NOT a relative. she left a mortgage that is about half the current value (done by appraisal). I want to assume this mortgage. the title deed has been transferred to my name. home owners policy is in my name. utilities are in my name. I have been paying the mortgage on time, in full. the mortgage company will not let me just ‘assume’ the mortgage without applying for the mortgage, going through a credit check, etc. they sent preliminary paperwork to start the assumption(I haven’t returned it yet). they want $900 for processing the request and then I will have to pay closing costs etc.. around $3000-5000 IF they approve me for assumption. Is there a way to just assume it for their fee and not have to apply? if I can’t, I might do better just getting a refinance loan . any advice would be appreciated.

    1. Hi Lydia:

      I want to make sure you get the right information and we can certainly look into your options to refinance. However, I think it’s best if you start by talking to one of our Home Loan Experts. You can get in touch with them by filling out this form or calling (888) 980-6716. Hope this helps!

      Thanks,
      Kevin Graham

  24. My mother recently passed away. I’m listed on deed. She had a mortgage. I would prefer to purchase my own home. What are my options

    1. I’m sorry to hear about your mother. You can sell the home. The only thing you have to do is pay off the mortgage and then you can keep the rest of the money. You would contact the servicer when you’re getting ready to sell about obtaining a payoff statement and the procedure. Then you can buy a home of your own. If you want to look into mortgage options for that right now, you can get a preapproval online through Rocket Mortgage or call (888) 980-6716 and one of our Home Loan Experts would be happy to work with you.

1 2 3

Leave a Reply

Your email address will not be published. Required fields are marked *