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Hypothetical will/house/mortagge question

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If some leaves you their home in their will and there is still a mortgage on it, what happens exactly?

If it matters the payoff on the mortgage is less than the value of the home.

Does the person inheriting it just make keep making payments?

Do you have to notify the bank?

Does the bank switch the mortgage over to your name or do they require you apply for a new mortgage? What if your credit is horrible and you couldn't get a mortgage?

Does probate notify the bank?

Inquiring minds want to know.


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OK, the estate of the deceased is to continue making the mortgage payments on the house until either the house is sold or the mortgage is paid off. I do not know how a mortgage would transfer in this case. If I were the executor, I would just say sell the house, pay off the mortgage, and then the rest of the funds goes into the estate to be divided. However, I do not know how the will is written either.

I however would suggest a good real estate attorney who understands probate issues to know what would happen in this situation regarding the transfer of a home in an estate that has a mortgage on it. Also note that many time, the bank will call the note if the signer has died and the estate will be required to pay off the entire note relatively quick.

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Find out if the deceased had an insurance policy on the mortgage. When my FIL died the insurance policy he and MIL had paid off the note so she owned the house free and clear. Good thing too, they didn't have life insurance and this is what allowed her to stay in the home since she didn't (and still doesn't) work.

Odds are if there was such a policy that the executor of the estate would have told you, but if the deceased didn't leave clear info they may not be aware themselves that such a policy is in place.

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