When someone passes away, their family is typically responsible for tying up their loose ends, which may mean contacting the mortgage company. If a deceased individual had an outstanding mortgage balance, notifying the mortgage company as soon as possible can clarify the next steps concerning the property and repayment of debts.

    Failure to communicate this information to the mortgage company can lead to complications, misunderstandings, and financial repercussions. Even after someone passes away, their debts, including their mortgage, don’t disappear. Depending on the circumstances, they may fall onto the shoulders of their heirs or the estate.

    Keep reading to learn more about when to notify a mortgage company of death and why it’s important.


    • Immediately contacting the mortgage lender when someone passes away is crucial to avoid misunderstandings and financial consequences.
    • Mortgages don’t disappear after death; they may still need to be repaid by heirs or the estate.
    • Dying without a will can complicate the process of managing the deceased’s mortgage.

    What Happens to Your Mortgage When You Die?

    Do you have to notify a mortgage company of death? Unfortunately, while your loved ones might be dealing with grief and trying to manage your affairs, your financial obligations will continue to demand attention. It’s essential to inform the mortgage company about a borrower’s death as soon as possible.

    When an individual passes away, their mortgage debt isn’t automatically dissolved. Instead, the responsibility to repay the loan may transition to heirs, the estate, or the co-borrower. If someone inherits the house, they can contact the lender about assuming a mortgage after death or refinancing it.

    Failing to communicate with the lender can lead to foreclosure if payments aren’t made, which means the loss of the property.

    The situation can be even more complicated if someone passes without a will. In this scenario, state law dictates how assets, including houses with mortgages, are disbursed. Often, the process can be long and tedious, with the property potentially subject to probate.

    In any case, whether there’s a will or not, the mortgage must be repaid, even after death.

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    Notifying a Mortgage Company of Death: When and How

    Dealing with someone’s affairs, including contacting their mortgage lender, can be daunting, especially when they’re grieving. However, the deceased’s financial obligations must be addressed as soon as possible. Notifying the mortgage company of a death is crucial, and doing it immediately can prevent future complications.

    Typically, it’s best to notify the mortgage company promptly, with some states having requirements that allow you to do it within 30 days of someone’s passing. You can find their contact information on mortgage statements or by contacting your loved one’s estate attorney.

    Waiting too long to notify the mortgage company when the borrower dies can lead to accumulated late fees, missed payments, risk of foreclosure, and further complications if the property is part of an estate.

    How to notify a mortgage company of death

    When it comes to notifying the mortgage company, there’s a formal process you can follow. Some lenders might have specific procedures, but these general steps are common among them:

    • Notify the mortgage company in writing: Preparing a formal letter informing the mortgage company of the borrower’s death provides them with documentation. The letter should include the deceased person’s name, address, date of death, and mortgage or account number.
    • Provide a death certificate: You must supply the lender with a death certificate to officially confirm the borrower’s passing.
    • Present executor documents: If the deceased had a will and named an executor, the lender will require documents affirming their designation. In cases where there isn’t a will, an administrator appointed by the court can deliver the necessary documents.
    • Deliver contact information: Provide the mortgage lender with the contact details of the person handling the deceased estate. This tells them who to communicate with about future matters.

    Depending on the circumstances, the lender may require other documents like the will, trust paperwork, or probate court letters.

    Assuming a House With a Mortgage

    If you’ll be assuming a mortgage after a death, you’re responsible for certain obligations. When you inherit a house with a mortgage, you become liable for the mortgage payments. The property and its associated debts don’t disappear; they’re commonly transferred to the inheritor. If the mortgage isn’t paid, the property could be at risk of foreclosure.

    When someone passes, their heirs don’t automatically assume the home loan; it must be transferred. Transferring a mortgage after death involves the inheritor working with the mortgage lender to ensure a smooth transition.

    Here are the steps typically involved:

    1. Lawyer up: Inheritors should consult with an attorney as soon as possible. Real estate attorneys can provide guidance based on their specific situation and state laws.
    2. Gather documentation: Essential documents include the death certificate, deed to the house, current mortgage contract, and anything proving your right to the property.
    3. Contact the lender: Notify the mortgage lender about the death and express your intention to assume the loan. They’ll guide you through their specific process, which varies by institution.

    Older woman notifying mortgage company of death.

    Lenders require all individuals assuming mortgages after death to meet the “ability to pay” requirements. These requirements ensure the individual can repay the mortgage loan and involve a process similar to applying for a mortgage, such as credit checks, proof of income, and other financial verifications.

    If you can’t or don’t want to assume the mortgage loan, you have other options. One of the most common is to sell the home. The proceeds from the sale can then be used to pay off the mortgage. Heirs can also allow the house to be foreclosed upon. However, this may negatively impact the credit of the deceased’s estate, so most professionals advise against it.

    If the cost of assuming a mortgage after death is too high, heirs can try to refinance the mortgage loan, which might offer better interest rates and repayment terms that make monthly payments more manageable.

    How to Prepare Your Mortgage for After Death

    Preparing your mortgage for after death can reduce the burden on your loved ones. You can discuss these options with your heirs to determine the best one for your unique situation.

    Mortgage protection insurance

    One of the easiest ways to protect your mortgage and heirs is to invest in mortgage protection insurance (MPI).

    Mortgage protection insurance is designed to repay the balance of your mortgage if you pass away. Some policies also cover mortgage payments for a set period if you become unemployed or disabled. The amount of coverage typically aligns with the mortgage balance, and as you pay your mortgage over time, the coverage amount decreases.

    Unlike other life insurance policies, MPI policies usually assign the lender as the beneficiary to ensure the payout goes directly to them to repay the mortgage.

    Thoughtful estate planning

    Thoughtful estate planning is a more proactive approach that allows you to protect your heirs if you want them to assume the mortgage after your passing. Drafting a comprehensive will specifying how your assets, including property, will be divided can prevent legal battles among heirs.

    Additionally, you can transfer your property to a living trust to avoid the probate process, making it more affordable and less time-consuming for heirs after your passing. You can also pay more of your principal balance, reducing it to lessen the financial obligations of those who would assume your mortgage.

    Make sure to discuss your intentions and financial situation with your heirs to ensure they understand the mortgage and your plan for repayment to avoid surprises.

    Ensuring Proper Notification After a Borrower’s Death

    Knowing when to notify the mortgage company after a death is crucial for preventing financial complications, such as accumulated late fees, misunderstandings, and the risk of foreclosure. Gathering critical documents like the death certificate, property deed, and estate paperwork can ensure a smooth transaction.

    Additionally, partnering with a trusted mortgage company like Griffin Funding can simplify the process. We offer guidance and support tailored to these sensitive circumstances to help your heirs navigate the mortgage process when you pass away. Apply for a mortgage online today.

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    Frequently Asked Questions

    Can a mortgage remain under a deceased person's name?

    No, a mortgage can't remain under a deceased person's name. When the borrower passes away, the loan won't disappear. Instead, it needs to be paid.

    After the borrower passes, the responsibility for the mortgage payments immediately falls on the borrower's estate or heirs. Transferring the mortgage after a death may be allowed if they meet certain criteria.

    Is mortgage debt forgiven after death?

    No, mortgage debt isn't forgiven after death. Instead, it becomes the estate's responsibility, and its assets can be used to pay off the mortgage. If someone inherits the property, they assume the mortgage and must pay it by continuing the regular payments or refinancing the loan into the heir's name. You can also sell a home with a mortgage, allowing you to pay off the balance in full.

    If the deceased has mortgage protection insurance, it'll pay the mortgage balance upon their death. However, you should check to see if they have a policy before assuming so.

    Who is responsible for mortgage payments after death?

    After the borrower passes away, the estate is typically responsible for the mortgage payments. However, joint borrowers and co-signers become responsible if one passes away. This is common for spouses and other family members.

    If the property is inherited, the heir may take over the mortgage payments if they plan to keep the property.

    If you're unsure who should make mortgage payments after the death of a loved one, contact the mortgage lender as soon as possible. They can help you determine the next steps while giving you a grace period to get the deceased’s affairs in order.
    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.