Loan transfer upon death

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Loan transfer upon death

Hello my mom passed away two years ago and so me and my brothers have been
paying the monthly house payments to loan that has my moms name on it still, so If
we tell the company that she has passed and we are still paying will we have to pay
whole house to them or do they transfer loan into our names? I’m worried about
fees, the house being taken away or having to pay whole house off.

Thanks.

Asked on November 5, 2016 under Real Estate Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

An acceleration clause is a provision in a mortgage that allows the lender to demand immediate payment in full of the remaining balance if certain events occur (such as the sale of the property, late payments, etc.). That having been said, typically it is rare to find such a clause which is triggered by the death of the "mortgagor" (i.e. the property owner). As a general rule, those who inherit a property become responsible for paying the mortgage on it and the lender is typically required to continue to accept the monthly payment until the maturity date. This benefits those who inherit since they do not have to go through the lender's application process and qualify for the mortgage. Bottom line, as long as your keep making all mortgage payments on time, you should be fine. However, if you contact the lender, they will in all liklihood transfer the mortgage into your names (and then you can each deduct the portion interest you paid on your individual tax returns), so long as you can prove that you and your siblings made the payments and made them on time.


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