What Happens With A Sole Mortgage and the Spouse Dies?

David Deem

If the mortgage was only in your name, and you were to pass on, your partner would become the sole owner of the home. He would not owe the bank any money, but since the home was pledged as collateral for your loan, it could foreclose and sell his home and use the proceeds to repay the debt.

If your partner wanted to continue living in the home and making payments, your lender would have to allow him to do so. He would still be bound to the same terms and have to maintain insurance, pay taxes and make the payments like before. Additionally, your lender could ask him to sign paperwork to “assume” the loan, making him legally responsible for repaying the debt, basically requiring him to “stand in your shoes” and become the borrower in place of you.

Like everything else in life, there are certain condition and restrictions. It is important that he contact the lender and discuss his options. Not all lenders are created equal, so if yours tries to deny him his rights or charge him penalties, he should seek appropriate professional advice.



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