My dad passed away two months ago. I’ve been residing in his home for a while now. I was there with my wife to help care for him. My wife also passed away unexpectedly. Now I don’t know what to do about the mortgage. I rely on disability benefits and have nowhere else to live. I’ve just been making the payment because I’m afraid to inform the finance company that he passed away. Can I get the mortgage in my name somehow? — James
Hello James. I’m very sorry for your loss. The last thing you should be worrying about right now is maintaining your home because I can’t imagine what it’s like to lose a spouse and a parent in a short period of time.
Fortunately, federal law does offer heirs protection when a loved one dies and there is a mortgage on their home. If you meet certain requirements, you might be permitted to take on your father’s mortgage. Even though taking on the mortgage might be your best option, you might still be able to qualify for a mortgage on your own if your income is low. Using Credible, you can compare mortgage rates from various lenders.
What happens to a mortgage when the borrower dies?
Mortgages typically can’t be transferred from one person to another. Until the borrower sells the property, they are accountable for paying back their mortgage. Then the new owner must secure financing on their own.
But under federal law, there are exceptions when the primary borrower dies. Here’s what can happen:
Whether you are a legal heir and whether there are other heirs will determine how simple it is for you to take on your father’s mortgage. You’ll need to come to an agreement on whether you can assume the mortgage and keep the property if there are other heirs to your father’s estate.
However, assuming the mortgage should be simple if you are the sole heir and there isn’t a cosigner on the loan.
Assuming ownership of a property
You must establish ownership of the property in order to take over your father’s mortgage. First, depending on the state where your father lived, his estate might need to go through probate.
Probate is a court-guided process that transfers property from a deceased person to their heirs. According to the last will, the court assesses a deceased person’s assets, pays off their debts, and distributes any remaining assets to heirs. If your father didn’t leave a will, the courts decide how to distribute his assets.
You can inquire with the lender about taking on your father’s mortgage once you have ownership of the property.
Assuming a mortgage
James, it was wise of you to continue making mortgage payments after your father passed away. By keeping the mortgage current, you reduced the risk of foreclosure and proved that you could make the payments even on a disability income.
Inform the lender that you have inherited your father’s house once you have taken possession of it. They can guide you through taking on the mortgage. They might ask you to show documentation proving both your legal ownership of the property and the passing of your father.
Additionally, as required by the mortgage lender, you’ll need to purchase homeowners insurance in your name. You might be able to speak with the current home insurance provider and request a transfer of your father’s policy to you. Alternately, you could compare prices for new homeowners insurance and switch your provider as needed.
It’s a good idea to continue paying the existing homeowners insurance and mortgage until everything is finalized in the interim to maintain their present status. Consult with a knowledgeable estate lawyer if you have any questions or need assistance navigating the mortgage assumption process.
If you decide to refinance after taking on the mortgage, visit Credible to compare mortgage refinance rates from various lenders.
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What happens if someone dies and still has a mortgage?
The surviving family who inherited the property typically makes mortgage payments to stay current while they arrange to sell the house. The mortgage servicer will start the process of foreclosing on the house if no one takes over the mortgage after you pass away or continues to make payments.
How do I take over my deceased parents mortgage?
Normally, you can handle the loan directly with the servicer. Remember that in order to assume the mortgage, you do not need to go through the underwriting procedure or requalify, but you will most likely need to provide a certified copy of the borrower’s death certificate (and possibly the borrower’s will).
Can a family member take over a mortgage?
A mortgage can’t typically be transferred from one borrower to another. Because of this, very few lenders and loan types permit one borrower to assume another’s obligation to pay off an existing mortgage.
Can you keep a house in a dead person’s name?
A house cannot be kept in the name of a deceased person; rather, ownership must be transferred in accordance with their Will or the State’s Succession Law. The new owner must apply for a new deed for the house at the county recorder’s office once they have been identified.