Q: My husband and I obtained a mortgage on our home in 2001. He passed away last year and I am current on my mortgage payments.
I am afraid to notify the bank of his passing because my salary alone more than likely would not meet income requirements. Am I in default by not notifying the mortgage company of his passing? Thank you for your expert advice!
A: When your spouse dies and you are on the mortgage, you continue to be the borrower under the loan and continue to own the home.
While the lender might see your spouse’s death as a transfer of title, there are federal laws that prevent the lender from calling the loan due to his death. You could talk to a real estate attorney about the issue, but unless you are refinancing your loan and need to apply for a new loan, your loan should remain in place.
You can notify the lender that he has passed away, but you may not have an obligation to tell them. You should remain current in your payments and take care of your family and yourself.
You should know that if you held title to the home jointly, you inherited your husband’s half of the home automatically and probably don’t need to anything to change the title to the home.
If you refinance the loan in the future and want to make sure that the only name that shows up on the title to the home is yours, you can work with the title company or settlement agent to take care of any paperwork to do that.
Hope this helps.
Read more about estate planning and what to do in case of the death of your spouse.