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Who Takes On Your Mortgage Debt When You Die? Typically, debt is recouped from your estate when you die. This means that before any assets can be passed onto heirs, the executor of your estate will first use those assets to pay off your creditors.
How to Take Over Mortgage on an Inherited House or Property Use other assets in the estate to pay off the existing mortgage. Take over the loan (assume it) and take responsibility for making future mortgage payments with the house deed and the loan in your name.
The general rule is that a mortgage may not stay in a deceased persons name, however exceptions may apply. Generally, if a person dies, title will transfer. If title transfers, it invokes a due-on-sale clause.
Those debts are owed by and paid from the deceased persons estate. By law, family members do not usually have to pay the debts of a deceased relative from their own money. If there isnt enough money in the estate to cover the debt, it usually goes unpaid. But there are exceptions to this rule.