Who Has Responsibility For the Mortgage When the Borrower Dies

In the unfortunate event of the homeowner passing away what happens to the mortgage that was in his or her name?  Is a relative responsible or a family member who might be living in the home?  We will look at what happens and any issues you may need to avoid with the mortgage.

Typically, the mortgage or any other debt is paid from the estate when you pass.  What this means is before any assets can be passed on to the heir’s debts would have to be paid off first.   Specifically, with mortgage debt, if someone co-signed for the loan, they are obliged to make the payments.  If nobody cosigned, then there are rules in place allow someone to take over making the mortgage payments until the home is sold.  If nobody takes over the mortgage payments, then the mortgage servicer will begin the foreclosure process.

If you inherited the property, then you can refinance the mortgage.  Sometimes, if there are multiple heirs then they would have to pay out possibly with the equity of the home.

As always, it is best to work with a good estate attorney and mortgage professional to learn about all your options.