The loan stays, but you have more time and more options than you might think.
Inheriting a house that still has a mortgage is common, and it can feel urgent. The short version: the loan doesn't disappear when the owner dies, but you generally have more time and more options than most families expect. The first step is to keep the loan from falling behind while you figure out which option fits.
Missed payments lead to late fees and, eventually, foreclosure. Taxes and insurance still need to be paid too, and unpaid taxes can lead to a tax sale (see our back taxes guide). If nobody has authority yet, contact the servicer and the estate's attorney or personal representative right away.
If you want to keep it, you may be able to continue the payments, assume the loan or refinance, depending on the servicer and your finances.
Sell the house and pay the mortgage from the proceeds. The estate needs legal authority to sell, which often means probate first.
A direct sale pays the mortgage at closing from the proceeds, with no repairs or cleanout. We buy houses with mortgages, back taxes and liens.
If the house is worth less than the loan, the lender may agree to a short sale or accept the deed. Talk to the servicer and an attorney first.
With more than one heir, decisions need agreement or a legal path around disagreement. See our guide to inheriting a house with other heirs and how selling just your share can work.
We're happy to walk through your situation first, including whether keeping, listing or selling to us makes the most sense. We'll tell you if another path is better.
General information only — not legal, tax or financial advice. Rules and costs vary by state and by property; confirm specifics with a licensed attorney, CPA or real estate professional.
Related: Inherited with other heirs · Probate & inherited homes · Foreclosure · Selling your share
The loan is owed by the estate and secured by the house. Heirs generally aren't personally liable unless they co-signed, but if the loan isn't paid the lender can foreclose, so keep payments current while you decide.
Generally not. Federal law (the Garn-St Germain Act) generally limits lenders from calling a home loan due when the home passes to a relative after the borrower's death. An attorney can confirm how it applies to your loan.
Yes. The loan is paid from the sale proceeds at closing. The estate needs legal authority to sell, which often means probate first.
Talk to the servicer about a short sale or deed in lieu and to an attorney about your exposure.
Tell us the situation and we'll walk you through every option, with no cost and no obligation.