Personal Finance

How to take over a mortgage when a loved one has passed away

Maurie Backman

Published: February 22, 2025 7:52 am

In today’s market, it’s becoming increasingly difficult to afford a house. Home prices remain sky-high, and mortgage rates are also elevated. And with the Fed’s interest rate cuts on pause, mortgage rates could stay elevated for quite a bit longer.

That’s why for some people, owning a house would probably be impossible if it weren’t for their parents helping with a down payment.

In this Reddit post, we have someone who’s getting to own a house not because their parents helped them buy it, but because they passed away and left the house to them. In fact, they made sure the poster’s name was on the deed to avoid confusion.

But unfortunately, the parents never owned the house outright. There was still a mortgage balance to pay off at the time of their death. And now, the poster is wondering whether they can take that mortgage over and how to go about things.

It may be possible to assume the mortgage

What the poster needs to do here is contact their parents’ mortgage lender or loan servicer and find out whether their mortgage can be assumed — meaning, whether they’re able to take it over. If the poster is able to assume the mortgage, they’ll be responsible for whatever monthly payments come with that loan.

Now it’s worth noting that the poster can continue to make payments on the mortgage without assuming it. But paying a mortgage on time can result in boosted credit, so it could work to the poster’s advantage to take over that loan officially.

Of course, some mortgages cannot be assumed. But in that case, it’s still possible for the poster to pay the mortgage and keep the loan current so they can avoid a scenario where they risk losing the house. To be clear, ignoring the mortgage isn’t a good idea, because then, the lender could seek foreclosure of the home to get repaid.

Consulting an attorney is a smart move

The situation the poster is in is a bit of a complicated one. So it’s a good idea for them to contact an attorney and review their options.

Even if the mortgage in question can be assumed in theory, if the poster’s credit isn’t great or if their income doesn’t meet their parents’ lender’s requirements, then taking over the mortgage may not be in the cards. So it’s good to have a professional to discuss different avenues with.

An attorney should also be able to help the poster work with their parents’ mortgage lender to take over the loan if that’s deemed to be the best course of action. This will likely mean having to provide documentation of the parents’ death and proof of the inheritance.

The poster may also want to seek guidance from a financial advisor who can tell them how to best manage their new asset. It’s a good idea to seek help from a professional any time someone is in a situation where their financial picture changes significantly. An advisor can help the poster manage their new set of expenses and, if applicable, use their inherited home to help meet their long-term goals.