Detailed answer: How taking over a deceased parent’s mortgage usually works in Vermont

1. Understand the basic rule: the mortgage stays with the property

A mortgage is a lien secured by the property. When a borrower dies, the debt does not automatically vanish. Whoever receives title to the house (the estate, an heir, or a surviving joint owner) takes the property subject to the mortgage unless the lender agrees otherwise. That means monthly payments and other mortgage obligations generally continue.

2. Figure out who legally owns the house now

How the house passes at death affects what you must do next:

• Joint ownership with right of survivorship: If the deed names you and your father as joint tenants or tenants by the entirety (common for spouses), the surviving joint owner usually becomes sole owner automatically. Check the deed at the local land records office (town clerk or municipal land records) to confirm.
• Property left by will: If your father left a will that gives you the house, the executor named in the will must transfer title as part of probate or settlement of the estate.
• No will (intestacy): State intestacy rules determine who inherits. The estate will generally need administration to transfer title to heirs.

3. Probate or estate administration may be required

If title does not pass automatically, the estate usually must go through probate or an administration process so the personal representative (executor/administrator) can transfer the property. Vermont’s Probate Division handles these matters and provides forms and guidance. See Vermont Judiciary – Probate: https://www.vermontjudiciary.org/programs-services/probate. The personal representative has authority to pay creditors and may be the person who negotiates with the mortgage lender.

4. Contact the mortgage lender promptly

Call the lender to let them know of the borrower’s death and to get the current payoff amount, account status, and the lender’s requirements for any assumption or transfer. Typical lender responses include:

• Allowing a loan assumption (rare without approval);
• Requiring the heir who wants the loan to qualify and refinance in their own name; or
• Requiring the estate or buyer to pay the loan in full on sale or transfer.

Lenders may require a formal assumption agreement, a credit check, proof of income, and executed documents from the estate’s personal representative. Do not stop communicating with the lender — missing payments can lead to foreclosure.

5. Common ways heirs take the property and deal with the mortgage

1. Assume the mortgage: If the lender permits, you may formally assume the loan and take responsibility for payments. The lender usually requires an application and underwriting.
2. Refinance in your name: You can obtain a new loan that pays off the existing mortgage; this requires qualifying for credit and income.
3. Take title subject to the mortgage: You may receive title while the original loan remains in the deceased borrower’s name. The lender can still enforce the mortgage if payments cease.
4. Sell the house: The estate or heirs can sell the property and use sale proceeds to pay off the mortgage.
5. Let the estate handle payment: The personal representative can continue paying from estate funds while the title transfer or sale is arranged.

6. Record the transfer and update title

After probate or after the lender accepts an assumption or payoff, you must record any deed transferring ownership at the town’s land records office so the public record reflects the new owner. The personal representative usually signs deeds for the estate.

7. Watch for other estate obligations

The estate remains responsible for debts, property taxes, and insurance until the title transfers or the mortgage is paid. If the mortgage is behind, the lender can begin foreclosure under state law. If you plan to keep the home, ensure mortgage payments, property taxes, and insurance are current.

8. When a lender can accelerate the loan

Mortgage contracts may include a “due-on-transfer” clause. Lenders often will not enforce acceleration against an heir who contacts them and seeks an assumption or refinance, but enforcement is contract- and lender-specific. Communicate early to reduce risk.

9. Get legal and financial advice for complex situations

Get an attorney if: ownership is disputed, the will is contested, the estate lacks funds to pay debts, foreclosure is imminent, or tax or title problems exist. A probate or real estate attorney can explain Vermont-specific rules and represent you with the lender.

For general information about Vermont probate procedures and requirements, see the Vermont Judiciary Probate page: https://www.vermontjudiciary.org/programs-services/probate. For general access to Vermont statutes, visit the Vermont Legislature site: https://legislature.vermont.gov/.

Helpful hints

• Collect key documents immediately: death certificate, mortgage statements, the deed, homeowner’s insurance policy, and your father’s will (if any).
• Contact the mortgage servicer within a week. Ask for the current balance, payment history, and any options for heirs (assumption, refinance, loan modification).
• Check the deed at the local land records office to confirm ownership language (joint tenancy, tenants by the entirety, or sole ownership).
• If the house was jointly owned with right of survivorship, bring a certified death certificate and recorded deed to the town office to update records.
• Keep making mortgage payments while you sort the title and estate issues to avoid foreclosure and credit problems.
• If you plan to assume or refinance, get prequalified so you understand what lenders will require.
• Ask the lender about escrow for taxes and insurance — the servicer may require immediate payment if escrow is empty.
• Consider speaking with a probate attorney early if the estate is large, complex, or contested. For simple, uncontested matters, the Probate Division’s resources can help you proceed without an attorney.
• Keep careful records of all communications with the lender and any payments you make from personal funds on behalf of the estate.