Detailed Answer

When a homeowner dies, ownership of the house and responsibility for any mortgage are separate legal questions. In Michigan you must (1) determine how title passes, (2) notify and work with the lender, and (3) choose a path to keep the property (assume, refinance, pay from the estate, or sell). Below is a clear, practical walk-through you can follow.

1. Figure out how title passes

Start by checking the deed and any estate documents. Common ways title passes after death:

• Joint tenancy with right of survivorship — the surviving joint owner typically becomes the sole owner automatically.
• Transfer-on-death (TOD) deed — if the decedent executed a valid TOD deed, the named beneficiary gets title outside probate when the decedent dies.
• Will or intestacy — if the property was only in the deceased’s name and there is a will, the will directs distribution. If there is no will, Michigan’s intestacy rules apply and a probate estate usually must be opened.

If the property must go through probate, the personal representative (executor/administrator) will handle estate assets, including deciding whether to keep or sell the home. For general information on Michigan probate procedure, see the Michigan Courts probate overview: Michigan Courts — Probate Courts.

2. Understand the mortgage stays with the property

Mortgages are secured by the property. Death of the borrower does not automatically cancel the loan. The lender still has a lien and the loan payments remain due. Even if you inherit title, the mortgage stays attached to the house unless the lender agrees to remove or modify it.

3. Contact the lender right away

Call the mortgage servicer, tell them of the death, and ask for (a) the current balance, (b) whether the loan is assumable, (c) whether a due-on-sale clause applies on a transfer, and (d) what documentation they need (death certificate, letters testamentary, etc.). Lenders often have a probate or estate department with procedures for deceased borrowers.

4. Your options to “take over” the mortgage

Depending on lender rules and loan type, typical options are:

• Assume the loan: Some loans are assumable (common with some FHA and VA loans). To assume, you usually must qualify under the lender’s underwriting standards and sign assumption paperwork. Check with the servicer and the loan documents. For general info on mortgage assumptions, see the CFPB: Can I assume a mortgage? and HUD guidance on FHA loan assumptions: HUD FHA Resources.
• Refinance into your name: If the lender will not allow an assumption or you prefer a new loan, you can refinance the mortgage in your name (if you qualify). Refinancing removes the deceased borrower from the mortgage and releases the estate from that liability.
• Have the estate pay off the loan: The personal representative can sell other estate assets or use estate funds to pay the mortgage.
• Sell the property: Selling the house pays off the mortgage in most cases.
• Do nothing (risk of foreclosure): Letting payments lapse risks foreclosure. If you need time, communicate with the servicer to request forbearance or a repayment plan while you sort title/finance matters.

5. Watch for due-on-sale issues

Many mortgages include a “due-on-sale” clause allowing the lender to demand full payoff on transfer of title. Lenders can (but do not always) enforce that clause after an owner’s death. If you are relying on a transfer-by-inheritance to move title to you, be prepared that the lender may require refinance or full payment.

6. Special loan programs — FHA, VA, USDA

Some federal loan programs have specific assumption rules. FHA and VA loans have historically been assumable under certain conditions and with lender approval. If the loan is FHA- or VA-backed, ask the servicer about assumption paperwork and requirements. Helpful resources include HUD (FHA) guidance: HUD and VA loan information: U.S. Department of Veterans Affairs — Home Loans.

7. If you inherit but cannot or do not want to take the loan

The personal representative can sell the house to pay the mortgage. If you keep the home without resolving the loan, the mortgage holder may pursue foreclosure if payments stop. Michigan has specific foreclosure timelines and procedures; keep the lender informed and consult a probate or real estate attorney for deadlines and protections.

8. Practical steps to take now

1. Obtain multiple certified copies of the death certificate from the county clerk (the lender will request one).
2. Find the deed, will, mortgage statements, and any outstanding insurance or tax records.
3. Contact the mortgage servicer and ask precisely what they require to consider an assumption, refinance, or new payment arrangement.
4. If title is in the deceased’s name only, consult the probate court or a probate attorney about opening the estate or using a small-estate affidavit (if eligible) to transfer title.
5. Consider hiring a Michigan probate or real estate attorney if the loan is large, the estate is complex, or the lender resists accommodation.

For general Michigan probate law background, the Estates and Protected Individuals Code (EPIC) governs wills, intestacy, and probate procedure. Michigan Courts has guidance for working with probate matters: Michigan Courts — Probate Courts.

Example hypothetical (illustrative)

Hypothetical: Dad owned a house in Michigan solely in his name and had a conventional mortgage with a due-on-sale clause. He died with no will. Steps you might take: (1) get the death certificate; (2) open a probate estate or qualify for summary/ancillary probate if eligible; (3) as personal representative, notify the mortgage servicer and ask if assumption is allowed; (4) if the lender requires it, apply to refinance under your name or arrange for the estate to sell the property to pay the mortgage. Throughout, keep the lender informed to avoid foreclosure.

Every situation differs based on loan documents, title status, and whether the estate has money to pay debts. If the mortgage balance is large, or if the lender resists a reasonable accommodation, consult a Michigan attorney to protect your rights and avoid foreclosure.

Disclaimer: This is general information only and not legal advice. It does not create an attorney-client relationship. For advice about your specific situation, contact a qualified attorney in Michigan.

Helpful Hints

• Collect these documents first: death certificate, deed, mortgage note, mortgage statement, homeowners insurance policy, and any will or trust documents.
• Contact the servicer within 30 days of learning of the death to avoid missed-payment issues.
• Ask the servicer whether the loan is assumable and what income/credit requirements apply.
• Check whether title passed by joint tenancy or TOD deed — that may avoid probate and speed up your ability to act.
• If the estate is small, ask whether a small-estate affidavit or summary probate transfer (if available) can transfer title without full probate.
• Keep paying property taxes and insurance while you decide. Lapsed insurance can create problems and lapse of taxes can lead to tax foreclosure in some localities.
• Document every call with the lender: who you spoke to, date, and what you were told. Get confirmation in writing if possible.
• If the lender threatens foreclosure, seek a probate or foreclosure-defense attorney immediately — Michigan has strict procedural rules for foreclosure timelines.
• Explore refinancing early. Interest rates and creditworthiness will affect your options.
• Use trusted resources: Michigan Courts (probate info) and federal resources (CFPB, HUD, VA) for loan-specific guidance.