Detailed answer — what you must know and do

When a homeowner dies, who ends up responsible for the mortgage depends on how the property was owned, the loan documents, and whether the estate goes through probate. In New Jersey the usual tasks are:

1. Identify how title is held.

   Look at the deed. Common possibilities:
   – Joint tenancy with right of survivorship or tenancy by the entireties: the surviving co-owner becomes sole owner automatically on death (no probate for the property).
   – Tenancy in common or sole ownership: the property will typically pass under the will or by intestacy and may need probate administration.
   – Property held in a living trust: the successor trustee can transfer title according to the trust without probate.

2. Check the mortgage documents and note any due‑on‑sale clause.

   Most mortgages contain clauses that let the lender call the loan due if ownership transfers. However, federal law limits lender enforcement in some death-related transfers. See the federal Garn‑St. Germain protections: a lender generally cannot enforce a due‑on‑sale clause against certain transfers caused by death (see 12 U.S.C. §1701j‑3). For text and details, see the federal statute: 12 U.S.C. §1701j‑3 (Garn‑St. Germain).

3. Determine whether you can assume the mortgage.

   There are two common paths if you want to keep the house and its mortgage:

   • Assumption: You formally take over the mortgage and become personally liable. Some mortgages allow assumption; others require lender approval and credit qualification.
   • Refinance: You take out a new loan in your name to pay off the old mortgage. This is common when the lender will not approve a direct assumption or when you want a different rate/term.

   Contact the lender early. They will tell you what proof they need (death certificate, letters testamentary/letters of administration, a new deed, proof of income, and a credit check).

4. If the property is in the decedent’s sole name, start probate if needed.

   If title does not pass automatically (for example, no survivorship or trust), the Surrogate’s Court handles administering the estate in New Jersey. The executor (named in the will) or an administrator (appointed if there is no will) will need letters testamentary or letters of administration to act on behalf of the estate. These documents let you legally access accounts and communicate with the lender about the mortgage. For New Jersey Surrogate information: New Jersey Courts — Surrogate’s Court. You can also review New Jersey’s statutes on estates and intestacy via the state Legislature site: N.J. Laws & Statutes (Title 3B: Estates and Trusts).

5. Prepare required documents and approach the lender.

   Typical items the lender will request:

   • Death certificate.
   • Proof of your authority to act for the estate (letters testamentary/administration or trustee documentation).
   • New deed showing the proposed owner (if transferring title).
   • Loan assumption documents or application for refinancing, credit and income documentation.

   The lender may agree to let the estate continue paying under the existing loan for a limited time while executors decide whether to sell, assume, or refinance.

6. Consider special loan programs and insurer rules.

   Government-backed loans (FHA, VA) have specific rules about assumptions and transfers on death. Check with the loan servicer or review HUD/Veterans Affairs guidance if the loan is insured by a federal program. For general FHA info see HUD.

7. If you receive the property by intestacy or will, finalize the deed transfer.

   Once the estate administrator or executor has authority, a deed can be prepared and recorded to transfer title. Recording the deed does not by itself remove the mortgage — the loan stays attached unless paid off or assumed with lender consent.

8. Protect the property and estate during the process.

   Keep paying mortgage, property taxes, and homeowner’s insurance to avoid foreclosure or liens while you sort out ownership. If the estate cannot pay, discuss short-term options with the lender promptly.

How long will this take?

Time varies. If the home passed by right of survivorship or trust, transfer can be quick (weeks). If probate is required, the process can take several months to a year depending on estate complexity and creditor claims. Start communication with the lender and the Surrogate’s Court early.

Key New Jersey resources

• New Jersey Courts — Surrogate’s Court information and local Surrogate contacts (probate procedures).
• New Jersey Statutes — Title 3B (Estates and Trusts) (statutes governing wills, intestacy, and estate administration).
• 12 U.S.C. §1701j‑3 (Garn‑St. Germain — due‑on‑sale protections) (federal limits on enforcing due‑on‑sale clauses in some death-related transfers).

Helpful hints — practical checklist

• Find the deed and mortgage paperwork immediately. The deed shows ownership; the mortgage shows loan terms and servicer contact.
• Order several certified copies of the death certificate from the funeral home or the state vital records office — lenders require originals or certified copies.
• Contact the mortgage servicer within 30 days. Early contact prevents misunderstandings and possible default reporting.
• If property is jointly owned with right of survivorship, prepare the recorded affidavit or new deed the lender or title company requires to clear title.
• Collect financial records the lender will want: pay stubs, tax returns, bank statements, and the decedent’s mortgage account statements.
• Think about long‑term affordability before assuming the loan. Qualify for an assumption or refinance only after you are certain you can handle payments.
• Get a title search and consider title insurance to find undisclosed liens or claims against the property before completing any transfer.
• Speak with a New Jersey probate or real estate attorney if the estate is complicated, if there are creditor issues, or if the lender resists an assumption.