The borrower died: what will happen to his mortgage?

Mortgage is the longest loan, the validity of the mortgage agreement may be up to 30 years. During this time, the borrower can endure various financial difficulties, problems with work, and even die.

The further fate of the mortgage in the event of the death of the borrower depends on many factors: the presence of heirs, co-coaches, guarantors, as well as insurance and health insurance.

Let’s start, perhaps, from the most common case, when a co-career is present in the mortgage other than the main borrower. A similar situation is formed when buying an apartment on a marital couple’s loan, as banks undertake to spouse or spouse to perform a coaches in a compulsory.

After the death of one of the spouses, the responsibility of the loan agreement is transferred to the second. Even if, when making a mortgage, your income was zero, you did not work or received a small wage, after the death of the second half you will have to respond to the bank.

If the second spouse has absolutely no funds to pay for mortgage debt, he can sell real estate and free himself from credit obligations. Only at the same time it will remain without housing and without profit, since all the money will go to repay the loan. And maybe the co-comforter will even leave in minus.

The fate of the mortgage in the presence of the guarantor is not much different from the availability of the coacher. Since initially the guarantor acts as a guarantor of the execution of credit obligations, then from it will be asked after the death of the borrower.

If, in addition to the guarantor, there are heirs who claim to a mortgage apartment, they take over the obligations of the deceased borrower. Then the guarantor can continue to act as a guarantor.

Life and health insurance has long been used by banks as a bait. The lender promises a reduced percentage subject to the conclusion of the insurance policy. Therefore, very often citizens come across such a trick.

But at the same time, insurance can very much to help heirs in case of death. If the cause of death is suitable for an insured case, then the company itself will pay off a mortgage.

After paying the debt and removal of encumbrances with property rights, real estate goes into the hands of heirs.

Heirs have two events development options:

They agree to inheritance, and thus automatically receive obligations under the loan agreement. After paying a loan, real estate is fully in the ownership of heirs. It turns out that the debts will not go out.

The second option, implies the rejection of the mortgage, and, accordingly, the refusal of all credit obligations. But the apartment owners will not work. The state will assume the obligations of the deceased borrower, and then realize real estate.

Unfortunately, any person who at least somehow tied to the apartment of the deceased borrower, becomes new borrowers. In essence, only in the absence of heirs, guarantors or co-coaches, all obligations take on the state.