Assuming a Mortgage After Death: The Process and Pitfalls
What happens to a mortgage when someone passes away? Dive into the essentials of assuming a mortgage after death from the process to pitfalls.
Losing a loved one is a time of hard decisions. What to do about their home and mortgage is often one of the biggest choices family members need to make. If you’re facing the task of assuming a mortgage after a death, it’s important to understand the process and be aware of potential pitfalls.
In this guide, we’ll explain what it means to assume a mortgage and how to move forward with confidence.
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Understanding mortgage assumption
When you assume a mortgage, you take over the seller’s existing loan terms. These typically include the interest rate, remaining loan balance, and established repayment period.
Unlike a standard mortgage, when you’re buying a home with your own new financing, assuming a mortgage means you agree to step into someone else’s loan contract — in this case, the original borrower who has passed away.
However, most lenders still require approval for a mortgage assumption, which involves assessing your creditworthiness. There is some flexibility when a death is involved, which we’ll discuss more below.
