If my father recently past away and left me the house, what happens to it if the life insurance proceeds will not cover the outstanding mortgage debt?

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If my father recently past away and left me the house, what happens to it if the life insurance proceeds will not cover the outstanding mortgage debt?

Asked on March 11, 2012 under Estate Planning, Massachusetts

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

I am so sorry for your loss.  Generally speaking, when you inherit the house you inherit it with the mortgage debt. You do not have to pay off the mortgage with the life insurance and if there are other beneficiaries under the Will it is likely that they will object to that course of action.  Now, the mortgage lender can not call in the mortgage in this situation so you can continue to pay the mortgage until such time as you chosse to refinance or sell.  Good luck. 


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