What happens to a mortgage when someone dies without a will?

Upon someone’s death, the court appoints an executor of the estate who is usually a close relative. The mortgage enters into an unsettled estate unless it is held in an estate or has a transfer-on-death deed. The executor uses the existing assets to pay off the mortgage until the house is sold or an heir is decided upon.  

Mortgage debt is generally not waived off upon someone’s death. All the deceased’s assets are entered into an estate and any debts are paid off using them. If it is a cosigned mortgage, the surviving cosigner is responsible for making all the remaining payments regardless of whether they inherit the property. 

If the surviving family wants to keep the house, they’ll make the payments once they transfer the ownership of the loan. But if they want to sell the home inherited, they’ll need to make the mortgage payments until the house is sold. 

If no one makes any payments or sells the house after the homeowner’s death, the mortgage lender will foreclose the loan. If an heir is named and they don’t make the payments or sell the house, the creditor still goes ahead with the foreclosure after the loan is transferred to the heir. But the heir’s credit is severely affected.