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I am about to inherit a house in California, but it comes with a mortgage loan. What should I do?

What Should I Do if I Inherit a House with a Mortgage Loan?

The normal rule, under the California probate code, is that you inherit a house with the loan, unless the decedent left a will in which he or she specifically stated otherwise. It means that you would inherit something that may be valuable. However, you will have to take the burden of paying taxes and monthly mortgage dues. If you can’t afford to pay the mortgage , decide whether to sell the house, rent it, or sell your property.

Many mortgage loan contracts contain a due-on-sale clause. This clause requires the owner to re-pay the balance due on the loan when the property is sold. However, this clause does not apply when you become the new owner through inheritance, and you intend to live in it. If you plan to rent the house, the bank will likely request you transfer the mortgage loan to your name.

The heirs do not have to assume a reverse mortgage loan on an inherited house.

Call San Diego estate planning and probate attorney Scott Grossman for a free discussion of your case, and order his free legal book The Insider’s Guide to California Probate and Trust Administration.

Probate (noun):

The process of proving in court that the will of a person who has died is valid. It involves proving before a competent judicial authority that a document offered for official recognition and registration as the last will and testament of a deceased person is genuine. Not all wills must go through this in California. See our infographic to help you determine if your loved one’s estate must go through probate.

Estate (noun):

An estate includes the things that a person owns. The things left by someone who has died can be distributed based on a Will, Trust, or Intestate laws. Estates have to be administered in the Probate Court if the estate meets certain criteria. See our Infographic on The Probate Process.

Scott Grossman

Scott Grossman


The Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307

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