Overview
When a homeowner dies, the mortgage on the home does not vanish. Under Nebraska law, the mortgage remains secured by the property. If you want to keep the house, you must make arrangements to continue paying or assume or refinance the loan. Which route you take depends on how title to the house passes (will, intestacy, joint ownership, or other transfer), what the lender allows, and whether the estate goes through probate.
Disclaimer
This information is educational only and is not legal advice. Consult a qualified Nebraska attorney for advice about your specific situation.
Quick answer — the main steps
- Find the deed, will, and mortgage documents and confirm who holds title.
- Notify the lender and ask whether loan assumption is allowed and if a death or transfer triggers a due‑on‑sale clause.
- If you will keep the house, get legal authority to act for the estate (letters testamentary or letters of administration) or receive title by operation of law or valid transfer document.
- Either assume the mortgage with the lender’s approval or refinance in your name; otherwise make arrangements with the estate to keep payments current.
- If you cannot keep the loan current or the lender won’t approve an assumption, consider sale of the property through probate or by the personal representative.
Detailed answer — what to do, step by step
1. Confirm ownership and how title passes
First, determine how title to the home passes. Common situations:
- Joint tenancy with right of survivorship or a tenancy by the entirety (if applicable): title typically passes automatically to the surviving owner(s) outside probate.
- Transfer‑on‑death/beneficiary deed (if used): property transfers to the named beneficiary on death without probate.
- Deed in sole name with a will: the will directs distribution, but title commonly passes only after probate or a transfer by the personal representative.
- No will (intestate): Nebraska intestacy rules determine heirs; the estate representative usually handles the property through probate.
Where title passes determines whether someone can deal directly with the lender or whether the estate’s personal representative must act. See Nebraska probate statutes (chapter 30) for the probate process: Neb. Rev. Stat., chapter 30.
2. Contact the lender promptly
Call the mortgage servicer as soon as possible. Explain the death, provide a death certificate if requested, and ask these key questions:
- Is the loan assumable? If so, what are the lender’s qualification requirements?
- Does the mortgage include a due‑on‑sale clause or other provision that could accelerate the loan when title transfers?
- What documentation will the lender accept to recognize a new payer (letters testamentary, certified death certificate, recorded deed)?
Federal law and lender policies affect whether an assumption is allowed. Mortgage servicers often require approval of any new borrower.
3. Obtain authority to act for the estate when required
If the property is part of the probate estate, the court will appoint a personal representative (executor or administrator). That person receives legal authority (letters testamentary or letters of administration) to manage estate assets, including negotiating with the lender, making payments from estate funds, or selling the house. Nebraska probate court information: Nebraska Judicial Branch — Probate.
4. Options to keep the house
Your main options to take over the mortgage are:
- Loan assumption: The lender permits you to be substituted as borrower under the existing mortgage. The lender may require credit approval and documentation.
- Refinance: You pay off the deceased’s loan with a new loan in your name. This eliminates any due‑on‑sale issues and places full responsibility on you.
- Continue payments as administrator or heir: If estate funds or other heirs agree, the estate can continue making payments while the property is administered or until a buyer is found.
Which choice is best depends on your credit, interest rates, the lender’s rules, and estate liquidity.
5. If you do not assume or refinance
If you cannot or do not take the loan onto your own credit and payments lapse, the lender can initiate foreclosure under Nebraska law. To protect the estate and heirs, keep payments current or work with the lender to arrange loss mitigation or a short sale. For laws governing mortgages and foreclosure see: Neb. Rev. Stat., chapter 76 (Real Property).
6. Tax, insurance, and homestead considerations
Make sure the property stays insured and property taxes are paid. Nebraska has protections and exemptions that may affect the estate and surviving spouse; review the relevant statutes and consult counsel about homestead and exemption rights. General real property statutes: Neb. Rev. Stat., chapter 76.
7. Get any agreement in writing
Whenever the lender agrees to an assumption, forbearance, modification, or other arrangement, get the full agreement in writing. Confirm who is legally responsible for future payments and whether the original borrower’s estate remains liable.
Common scenarios and what they mean for you
Hypothetical A — Father died owning the house in his sole name and there is a mortgage
If the father left a will naming you as beneficiary, the estate will usually need probate to transfer title unless a nonprobate transfer exists. The personal representative should contact the lender, continue payments if possible, and either arrange for you to assume or refinance the mortgage or sell the property to pay creditors.
Hypothetical B — House held jointly with right of survivorship
Title passes to the surviving owner immediately. The survivor still must deal with the mortgage. If the survivor is not on the mortgage, the lender may demand payment or require refinancing; contact the lender quickly to request options.
When to hire an attorney
Talk with a Nebraska probate or real estate attorney if any of the following apply:
- The estate must go through probate and you need to act as personal representative.
- The lender refuses an assumption and foreclosure is possible.
- Heirs disagree about how to handle the property.
- Complex title issues, tax concerns, or potential creditor claims exist.
An attorney can help you interpret the will, obtain court authority, negotiate with the lender, and prepare documents to transfer title or refinance.
Helpful hints
- Act fast: missing mortgage payments can lead to default and foreclosure. Contact the servicer right away.
- Collect documents: death certificate, mortgage statement, deed, will, and any loan correspondence.
- Ask the lender about assumption rules and whether a formal application is required.
- Keep the home insured and taxes current while matters are resolved.
- Get written confirmation of any arrangement with the lender before relying on it.
- If funds in the estate will cover payments, the personal representative should document payments carefully.
- Check whether a nonprobate transfer (joint title, beneficiary deed) already moves title outside probate.
- When in doubt, consult a Nebraska probate or real estate attorney; many offer brief initial consultations.
Relevant Nebraska resources
- Nebraska Revised Statutes — Probate (chapter 30): https://nebraskalegislature.gov/laws/browse-chapters.php?chapter=30
- Nebraska Revised Statutes — Real Property (chapter 76), including mortgages and foreclosure rules: https://nebraskalegislature.gov/laws/browse-chapters.php?chapter=76
- Nebraska Judicial Branch — Probate court information: https://supremecourt.nebraska.gov/courts/probate
Next steps checklist
- Locate the deed, mortgage statement, and will (if any).
- Order certified death certificate copies.
- Call the mortgage servicer and explain the situation.
- If probate is needed, contact the county probate court or a probate attorney.
- Decide whether to assume, refinance, or sell—and get any lender agreements in writing.
Handling a mortgage after a family member’s death can be stressful. Prompt communication with the lender and clear legal authority to act (when required) will protect you and the estate. Consult a Nebraska attorney for advice tailored to your facts.