Q: My husband and I obtained a mortgageA Mortgage is a document granting a lien on a home in exchange for financing granted by a lender. The mortgage is the means by which the lender secures the loan and has the ability to foreclose on the home. 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 loanA Loan is an amount of money that is lent to a borrower, who agrees to repay it plus interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds.. and continue to own the home.
While the lenderA Lender is a person, company, corporation, or entity that lends money for the purchase of real estate. might see your spouse’s death as a transfer of titleTitle refers to the ownershipOwnership is the absolute right to use, enjoy, and dispose of property. You own it! of a particular piece of property., there are federal laws that prevent the lender from calling the loan due to his death. You could talk to a real estateReal Estate is land and anything permanently attached to it, such as buildings and improvements. attorneyA Real Estate Attorney is an attorney who specializes in the purchase and sale of real estate. 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 companyA Title Company is the corporation or company that insures the status of title on real estate (called title insuranceTitle Insurance is insurance that protects the lender and the property owner against losses arising from undisclosed defects or problems with the title to property.) at a closing, and may handle other aspects of the real estate closing. or settlement agentAn Agent is an individual who acts on behalf of a consumer. A real estate agent represents a buyer or a seller in the purchase or sale of a home. Licensed by the state, a real estate agent must work for a broker or a brokerage firm. An insurance agent helps a consumer purchase an insurance policy. Insurance agents are also licensed by the state. 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