What Happens to a Mortgage When Someone Dies in Oklahoma?
Although many people may own a home, not as many own it free and clear. Lots of individuals have mortgages on those homes, and that can introduce some complexities when the homeowner passes away. So, how is a mortgage handled when someone dies in Oklahoma? Keep reading below to learn all the details.
Is a Mortgage Immediately Due Upon the Homeowner’s Death?
No, a mortgage is not immediately due in full upon the homeowner’s death. However, there are some important things you should know. Most mortgages contain a “due on sale” clause. This means that the full amount of the mortgage is due upon the sale or transfer of the property.
One important clarification is that there is a federal law in place to protect relatives from this “due on sale” clause. The law is known as the Garn-St Germain Act. This law protects a surviving spouse, child, parent, sibling, or other close family member who inherits a home from the deceased either through a will or the intestate succession laws. Under this law, the lender is prohibited from demanding an immediate and full repayment of the loan simply because the property changed hands. Establishing a comprehensive plan with an estate planning attorney can help ensure your real estate transfers smoothly to protected family members.
Must Mortgage Payments Continue to Be Made After the Owner’s Death?
Yes, someone must continue to make mortgage payments after the homeowner’s death. Failure to make the mortgage payments may trigger the foreclosure process, and the mortgage company could take possession of the property.
From a practical perspective, the executor of the estate often makes temporary mortgage payments until additional estate matters are resolved. In some cases, a surviving family member who inherits the home may be able to legally assume the mortgage and continue making payments. In other situations, family members might decide to refinance or even sell the home, which may involve evaluating property agreements alongside an Oklahoma City contract attorney. Regardless, you should never simply stop making mortgage payments after the owner’s death.
How a Mortgage May Be Handled After Someone’s Death
There are several different ways a mortgage may be handled after someone’s death. The specific path forward depends on who inherited the home, whether there was a co-borrower, the type of loan in place, and what the family wishes to do with the home. The most common things that may happen are:
- Keep the existing loan and continue making payments without refinancing
- Formally assume the loan and put your name on the loan documents
- Refinance the loan with a new mortgage in your name
- Sell the home and use the proceeds to pay off the mortgage
While a mortgage can add to the complexity of handling a home after someone’s death, it does not mean that the mortgage will automatically become due in full. If you have lost a loved one, it is important to work with an experienced probate attorney who can help you understand all your legal options so that you can make the choice that works best for you and your family. Call Helton Law Firm today to schedule an initial consultation and let us help you plan a path forward.
