What happens when you inherit a house with a mortgage?

Asked on December 11, 2015 under Real Estate Law, Florida


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

Answered 5 years ago | Contributor

As a general rule, when a mortgaged property changes ownership, the mortgage lender has the right to demand full payment of the entire loan balance. This is because most mortgages include what is known as a "due on sale" clause that allows the lender to call the mortgage balance due if the home changes hands. However, the law is different when a home that is inherited is encumbered by a mortgage. In such a case, the person who inherits gets both the property and the loan. Therefore, the lender can't call the loan due as long the monthly payments are made.

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