What happens to a mortgage loan on a home that goes into probate? Can I keep the same loan arrangement w/ the lender or will it have to be refinanced?

I’m not sure if the loan was sold off to another party by the bank. Will this make a difference?

Asked on June 29, 2009 under Estate Planning, California


B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

As long as the home is still in the estate, and not deeded to one of the heirs, the loan can probably stay in place, as long as the payments are kept current by the estate (executor);  this is an entirely proper use of other money such as bank accounts that are in the estate, and the same is true for property taxes on the estate.  It probably doesn't matter whether the loan was sold or not. After the house is transferred out of the estate, it may be possible for the heir to assume the loan, but that's not certain.

I'm not a California attorney, and the law in your state may have something to do with what happens here.  The terms of the mortgage (including, but not limited to, whether it is assumable) will also have to be considered, along with the other details of the estate. One place to find a lawyer who can sort through the details for you is our website, http://attorneypages.com

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.