What Happens to a Joint Mortgage When Someone Dies?
Do you know what happens to a joint mortgage when someone dies? Many homeowners aren’t aware of this issue until they find themselves in such an unfortunate scenario. Altitude Home Loans breaks down the effects of someone’s death on a mortgage in this post.
Discover common joint mortgage death implications as well as options for the surviving party. For assistance with this and other lending issues, contact our specialists.
Mortgage Responsibilities After Death Don’t Change
When someone passes away with an outstanding home loan to their name, the lender still expects payment. The main responsibility of repaying a loan doesn’t go away, but death can affect the source of the money. If you’re the sole person named on the mortgage agreement and you pass away, your heir will have to assume the responsibility.
After someone’s death, heirs can either repay the loan using funds from the deceased’s estate or sell the house and reimburse the lender after the sale.
With a joint home loan, co-owner mortgage inheritance typically occurs. Even if one person dies, the other remains on the mortgage and is expected to pay.
Understanding Surviving Spouse Mortgage Options
Say you’re married and have your spouse as a co-mortgagor on your home loan. What happens to a joint mortgage when someone dies? As long as the co-mortgagors are legally married, the surviving spouse can assume all responsibility for the loan and prevent the home from going through probate court along with other assets.
During estate planning, joint mortgage agreements are important components worth discussing. Married couples typically see their shares transferred when one spouse dies while avoiding the probate process. However, once the surviving spouse passes away, their heirs must now assume the mortgage through the estate.
Consider Your Options for Mortgage Repayment Upon a Co-Mortgagor’s Death
Lenders expect home loans to be paid in full, even if one or both parties on the contract pass away. To ensure your loved ones can cover the mortgage should the unexpected happen, experts recommend looking into the following:
- Mortgage protection insurance
- Life insurance
- A will or trust
Mortgage protection insurance acts as a safety net for the loan itself, while life insurance funds may go toward paying off your house once a beneficiary receives them after your death. Creating a comprehensive estate plan, such as a will or trust, allows you to make your final wishes official and provide your loved ones with key information about your assets.
Consult Lending Professionals About Joint Home Loans
Now that you know what happens to a joint mortgage when someone dies, you can better prepare for the future. Discuss the pros and cons of entering this type of home loan agreement before you commit to anything. Contact the experts at Altitude Home Loans for personalized assistance.
We understand how death impacts all of the people on mortgage agreements and their loved ones. Our specialists will help you secure a loan that suits your interests. Call 520-500-1010 to get started.