What Happens to a Mortgage During Probate in California?

When someone passes away and leaves a mortgage behind, it doesn’t just disappear—and for many families in Los Angeles or Orange County, figuring out what happens to that loan can be a major source of stress during probate.

This blog explains exactly how mortgages are handled during probate in California, and what your options are if the estate includes a mortgaged property.

Does the Mortgage Still Have to Be Paid?

Yes. Even after the homeowner passes away, the lender still expects payments to be made on time. The mortgage is tied to the property—not the person—so it continues until:

• The home is sold

• The loan is paid off

• The heirs refinance it into their own name (if keeping the property)

Who’s Responsible for Making the Payments?

Until the estate is settled, the executor or administrator is responsible for ensuring mortgage payments are made. This is typically done using:

• Funds from the estate (bank accounts, etc.)

• Rent collected if the property is occupied

• A short-term advance from a probate loan company

• Contributions from heirs (in some cases)

Missed payments can lead to late fees, credit damage to the estate, and even foreclosure if not handled quickly.

Can You Sell a Home During Probate If There’s a Mortgage?

Yes, and it’s often the best option.

As long as you have the court-issued Letters of Administration or Letters Testamentary, you can list the home for sale and pay off the mortgage at closing. If the estate has:

• Full authority under the Independent Administration of Estates Act (IAEA): No court confirmation is needed

• Limited authority: Court confirmation will be required

Read: Selling a Probate Property in Los Angeles & Orange County

What If the Mortgage Is Underwater?

If the home is worth less than what’s owed, you may need to explore a probate short sale. This requires:

• Lender approval

• Probate court documentation

• Skilled negotiation

We’ve successfully helped families in LA and OC navigate short sales during probate with minimal delays.

Can the Heirs Keep the Property and Take Over the Loan?

Possibly. Under the federal Garn-St. Germain Act, heirs may be allowed to assume the loan without triggering a due-on-sale clause—but they’ll still need to qualify with the lender.

This can be a good option if one heir wants to live in the home and keep it in the family.

Let Us Help You Navigate a Mortgage During Probate

At The Borges Real Estate Team, we’ve helped dozens of families sell homes during probate—even those with mortgages, liens, or missed payments. We coordinate with lenders, attorneys, and heirs to make the process smooth and respectful.

📅 Schedule your free probate consultation today, and let’s talk about the mortgage, your options, and your next steps.