Client Question: My parent passed away last month and I inherited a house with a mortgage. What do I need to do?

Inheriting a property can be both a blessing and a challenge, especially when it comes with a mortgage. Here are the steps you should take and some important information to keep in mind:

1. Contact the Mortgage Servicer

First, reach out to the mortgage servicer to inform them of your parent’s passing. Be prepared to provide documentation, such as a death certificate, the will, and proof of your relationship to the borrower.

2. Continue Making Mortgage Payments

The estate should continue make the mortgage payments. It is a common misconception that debts die with the debtor. While you may not be personally obligated to repay the mortgage, the lender is still entitled to the repayment of the debt from the estate.

If the estate is without sufficient assets to make the payments, decisions should be made in consultation with an attorney about how to proceed. You may decide to continue paying the mortgage payments but if nothing is done, the lender will eventually foreclose.

3. Seek Legal Advice

Consulting with an attorney is crucial to fully understand your rights and obligations. An attorney can help you navigate complex legal requirements and ensure that all necessary steps are taken correctly. They can assist with opening an estate administration through probate court if required, which may be necessary for managing your parent’s financial affairs, dealing with creditors and legally transferring the property to your name.

Conclusion

Inheriting a property can be a complex process, especially when there is an outstanding mortgage. However, by understanding these laws and taking proactive steps, you can manage the inherited property and avoid the risk of foreclosure.

If you have any specific questions or need further assistance, don't hesitate to contact our office.