People often discuss the transfer of a home to the beneficiaries within a Last Will and Testament, but when a mortgage is still owed on that property the transfer of ownership must still address the amount owed.
A home’s mortgage will exist on real property until such time as it is paid off — whether that be through a sale, by payment in full by the estate of the decedent, or by an agreed-upon final payment as accepted by the mortgage company.
The property can be transferred to a third party (including one of the beneficiaries) by way of a Quitclaim Deed (or even through probate after death), but the mortgage will continue to exist and encumber the property until it is paid off (or through some mutually agreeable arrangement reached with the mortgage originator).
If one beneficiary wishes to maintain ownership of the property, typically an agreement must be reached amongst the beneficiaries to purchase the interests of those who wish to sell. Once that agreement is reached, the mortgage is addressed as discussed above.
To easily create a Will at a very affordable price, see Standard Legal’s Last Will and Testament legal forms software page.