Can you keep your home if the mortgage co-signer dies?

What happens when the mortgage co-signer dies?

By Romana King on February 10, 2017
Estimated reading time: 2 minutes

When a mortgage co-signer dies, both the estate and the homeowner are on the hook for the mortgage debt, no matter what

Q: My grandfather passed away and he was my mortgage co-signer. My loan is current. I have made all payments. My grandfather has assets, estate. A good amount. Will my home be included in any of that or be paid from any of that? If they went after his assets and the home was paid, would it still be my home? — Blake, Mission, B.C.

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Robert McLister is an independent mortgage planner at intelliMortgage and founder of RateSpy:

First off, depending on the lender, you may or may not be able to simply continue making payments as usual. Lenders typically require you to notify them if a co-applicant dies. Some lenders will allow you to keep paying the mortgage yourself. Others will re-qualify you to see if you can afford the payments on your own. If you can’t, the mortgage will have to be paid out or you’ll need to get another co-signor.

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Further to your question, if a home is owned in “joint tenancy,” the deceased party’s interest simply passes to the other owner. If the ownership if “tenancy in common,” the deceased party’s interest forms part of his/her estate and is distributed according to the will. An estate may require the other owner to buy out its interest. In this case, if the surviving owner can’t qualify for a refinance, they may have to sell the property.

Home ownership: Joint-tenancy, tenants in common, and more »

In your case, if you were not willed your grandfather’s interest and you didn’t have joint tenancy, you’d likely have to work a deal with the estate to get his share of the pie. But chat with legal counsel to be sure. Incidentally, regardless of the ownership structure, everyone on the mortgage has joint liability. In other words, lenders hold all mortgagors (often even the estate) fully responsible if the agreed-on payments are not made.

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Robert McLister is a mortgage planner at intelliMortgage and founder of RateSpy. Ask a Real Estate Expert: Ask our experts your property or real estate question »

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Comments Cancel reply

Warren Wielgus says:

June 2, 2020 at 6:06 pm

My wife passed away two years ago. We had a joint mortgage but I never notified my bank.
I’ve made all payments on the mortgage and was never late with a payment.
This bank is hard to deal with so I just am making the payments as usual.

Reply
Marcella Carey says:

October 19, 2020 at 5:30 pm

I co-signed a mortgage for my ex-husband he has passed away do I get to sell the house and keep the proceeds and not give any to his children

Reply
1. MoneySense Editors says:
  
  November 12, 2020 at 11:13 am
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
GRACE ROOT TUBANIA says:

January 20, 2021 at 10:39 am

PLEASE, ANSWER THIS FOR ME IF I HAVE A FAMILY MEMBER HAD MY DAD CO-SIGN HER NEW HOME IN LAS VEGAS WHICH IS BUILDING AS WE SPEAK AND IF MY DAD PASSES AWAY, WHAT WILL HAPPEN TO HER HOME IF SHE CANT MAKE PAYMENTS?

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Kristy Daley says:

December 25, 2021 at 8:58 pm

If I was joint tentants with survivorship and my mom. Passed away can I continue to pay exsistimg mortgage without having to requalify or refinance ?

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1. MoneySense Editors says:
  
  December 29, 2021 at 5:08 pm
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with a qualified advisor.
  
  Reply
Debbie a says:

November 30, 2022 at 6:15 pm

If I co signed a Mtg with one child and when I die does that get paid off from my estate? I have two other children and own a separate gone by myself

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