What happens to the mortgage when the homeowner passes away?

Question

Does it become the responisbility of the relatives to pay on the mortgage until it is sold?

Answer 1

There are two parts to a mortgage loan: (1) the mortgage; and (2) the mortgage note. The mortgage is a lien on the real property securing payment of the mortgage note. Only the person(s) signing the mortgage note is personally obligated to pay the mortgage note.

The mortgage however can be foreclosed (under the laws of the state in which the property is located) if the note is not paid. If this occurs any "equity value" in the real estate will be lost as once the mortgage is foreclosed either the lender or the party purchasing at the foreclosure sale will own the property.

The deceased person's estate is responsible to pay the debts of the estate. As a practical matter if the mortgage note cannot be paid, the lender will foreclose the mortgage lien rather than choose to pursue a claim against the estate.

The best option here is that the property should be listed for sale or rented to generate income to pay the mortgage note (either in full if sold or by monthly payments). The estate may wish to contact the lender and discuss the issue. However, the death of the mortgagor is likely a default under the mortgage entitling the lender to foreclose, so be careful with this approach.

Finally, you should contact a local real estate or probate attorney to assist with this issue as it can be complex.

Answer 2

Not unless they signed onto the mortgage.

I believe whatever is owed on the mortgage would be satisfied out of the property.

In other words, the relatives would not have to pay it, but the bank could sell the house to pay it off. If there is extra money left over after the sale then the relatives would get that.

If the person who died had other assets or money, then you could pay the mortgage out of that and keep the house.

Answer 3

It depends on a few things. How much is owed, If there is a benificiary on the mortgage the bank has the right to go to them for the money, if there is not one listed or signed, then they will try and go to the living kin and get the money, if this is happening, get a good lawyer, if there is no kin available, and depending on the clauses in the contract at the bank, they might try to say they own the house now, and sell it to pay off the mortgage. I hope this helps.

Answer 4

a opposite loan is only a fairness loan both in a lump sum or month-to-month funds. they could foreclose on it like all different type of loan and there are expenses and factors as a lot as ten% of the quantity borrowed upfront alongside with an adjustable pastime fee. once you would possibly want to pass to a nursing abode the employer will call the debt due. in case you enable the abode fall into disrepair they could call it due. If the resources taxes or coverage change into in the destiny late they could foreclose. many hazards and scams obtainable

Answer 5

what money they have will pay off some of it...like life insurance, then all of the other assets/personal property will be sold and that money used to pay it off. if they were married it becomes the spouses responsibility

Answer 6

are you the closest relative to the deceased if you are the house will be sent to probate court and the court will decide how the assets and liabilities are split up. i would talk to a lawyer experienced in estate planning who can help you with this.

Answer 7

I guess part would depen on the WILL, who the property was given to if she/he had much money in the bank or insurance or super fund.

Answer 8

It, as well as the property, become the responsibility of the estate.