Inherited a Florida House That Still Has a Mortgage?

First steps

Losing someone is hard enough without a mortgage to sort out. Take these steps first, in roughly this order:

1. Find the paperwork. The latest mortgage statement, property tax bill, homeowner's insurance policy, and any will or trust documents.
2. Notify the servicer. Call the number on the statement, tell them the borrower has passed away, and ask what they need from you. Federal servicing rules require them to communicate with a "successor in interest" once they confirm who you are.
3. Ask for a payoff statement. You'll need to know exactly what's owed.
4. Keep the house insured and secured. Tell the insurance company the owner has died. An empty house may need a vacancy policy.
5. Keep paying if you can. Missed payments add fees and can lead to foreclosure, even during probate.

The loan stays, but heirs are protected

A mortgage doesn't go away when the borrower dies. The debt stays attached to the house. But federal law, the Garn–St Germain Act, generally stops a lender from calling the loan due just because a home passed to a relative after a borrower's death. See 12 U.S.C. § 1701j-3.

In plain words: you usually don't need to qualify for a new loan just to keep the existing one in place. You do need to keep making the payments.

Florida probate basics

Before you can sell, someone usually needs the legal authority to sign the deed. In Florida, that often means probate, the court process that transfers a person's property after death. The two main types are:

• Summary administration. A shorter process, generally for estates worth $75,000 or less (not counting exempt property like homestead) or when the person died more than two years ago.
• Formal administration. The full process, where the court appoints a personal representative who can manage and sell estate property.

Florida's homestead laws can also limit who can inherit a primary home and how it can be sold, especially if there's a surviving spouse or minor child. If the house was in a living trust, probate may not be needed, and the trustee may be able to act.

A Florida probate attorney can tell you which path applies. Don't sign a deed or sales contract until you know you have the authority to.

Keep it, rent it, or sell it

• Keep it. If you want to live there and can afford the payments, you can usually keep the existing loan. Check whether the homestead exemption will continue or needs to be reapplied for.
• Rent it out. Rent may cover the payment, but you'll need landlord insurance, a budget for repairs, and time to manage it.
• Sell it with an agent. If there's good equity and the house is in decent shape, listing usually brings the most money.
• Sell it as-is. If the house needs work, is full of belongings, or several heirs need a simple split, an as-is sale may be easier.

How a payment takeover can work once you can sell

When the house has little equity and nobody wants to keep it, a payment takeover can be an option once the estate or trust has the authority to sell. The buyer takes the house subject to the existing loan and keeps making the payments. No repairs, no clean-out, and no commissions.

Just like any subject-to sale, the loan may stay attached to the estate or the borrower's name until it's paid off or refinanced, and the lender could call it due. Every heir who needs to sign must agree. The probate attorney and a licensed Florida title company should be involved from the start.

Common questions

Related guides

• The Due-on-Sale Clause: What It Is and How Real the Risk Is
• How to Sell a Florida House When You Have Little or No Equity