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Inherited Property With a Mortgage or Reverse Mortgage
A mortgage doesn't disappear when the borrower passes away — but heirs are not personally responsible for it unless they co-signed. The debt stays attached to the house.
Inherited Property Associates is not a law firm and does not provide legal or tax advice.
Traditional mortgages
Federal law (the Garn-St Germain Act) generally prevents lenders from calling the loan due solely because the home passes to a relative after death. Federal servicing rules also let a confirmed successor in interest get information about the loan. Keep payments current if possible while you decide what to do.
Reverse mortgages (HECM)
A reverse mortgage typically becomes due when the last borrower dies. Heirs usually receive a notice and have about 30 days to respond with their plans, then generally up to six months to sell or pay off the loan, with possible extensions. For FHA-insured HECMs, heirs can typically satisfy the loan by paying the lesser of the balance owed or 95% of the appraised value.
Your options
- Keep the home and continue or refinance the loan
- Sell and pay off the loan at closing
- Explore a short sale if the home is worth less than owed
No Upfront Costs
One call, every solution.
Tell us what you're facing. We'll listen, explain your options in plain language and handle the complexities from there.