What happens if the estate can not pay mortgage payment

UPDATED: Oct 1, 2022

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What happens if the estate can not pay mortgage payment

My husband passed away as sole owner of
our home.There is not enough in the
estate to make the mortgage payments.
What would be my options?

Asked on November 28, 2017 under Estate Planning, New Jersey


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the mortgage is not paid, the lender can foreclose on the home, whether it is a person who defaults on the payment or the estate of someone who passed away which defaults.
If you want the house, could afford it were it to be refinanced, and you are (presumably) the one who will inherit it, contact the lender and explain the situation and that you intend to refinance it once it goes through probate and is titled to you (you can't refinance until you have title, though you can get the financing lined up and ready to go once you have title). Lenders don't really want properties--they want to be paid. There is a reasonable chance you can work something out where they will give you time to get title and refinance--perhaps this lender will even extend you the financing/mortgage.
If you can't afford the house if you refinanced it and/or do not want it, then let the lender know that you will not be taking it and wish to let them foreclose.

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