When you have a joint mortgage and your co-borrower dies, you are still responsible for any loans on the property. If the co-borrower is your spouse, once their estate settles any proceeds can be used to reduce the mortgage loan balance. It can also be used to pay it off as well.
Death of a Borrower
You may be able to file for a hardship mortgage modification if the payments are unaffordable due to the joint borrower’s death. If the lender will not modify the loan, you can also apply for a refinance. If necessary, lower the mortgage balance by using monies received from your co-borrower’s estate. This will improve the loan-to-value ratio, giving you a better chance of receiving an approval on your refinance request.
If your current lender is unable to approve any of the above solutions, try other mortgage lenders in your area. You can also check online for lenders that offer a refinance. Research the lender’s reputation before you apply for the loan. Avoid using a lender if you do not feel comfortable having them refinance your loan.
If you have exhausted all attempts to lower the mortgage payments, you may have to consider selling the property or moving out and trying to rent it.