Posted: Fri Mar 26, 2004 6:00 am Post subject: Assumption clause allows seller to transfer the mortgage
Assumption clause is a provision in an assumable mortgage, which allows the existing mortgage to be transferred from the seller to the buyer. The buyer takes over the responsibility of repaying the existing mortgage loan. It helps in saving the buyer's money since a new mortgage requires fees towards the closing cost and possibly higher market-rate interest payments.
Whether or not a loan can be assumed, and the conditions under which it can be assumed, are stated in the loan documents. These conditions are given below.
Simple Assumption:
It requires minimal work and cost. The buyer is allowed to take ownership of the property without providing any information on his/her credit history and income. In this method of assumption, the seller of the property remains liable for the repayment of the loan until and unless he obtains a release from the lender.
Qualifying assumption:
In this case, the loan can be assumed by judging the credit status of the buyer. The buyer's credit history and income are reviewed to find out whether he has the ability to repay the loan. In this type of assumption, the seller of the property cannot be held responsible for the repayment of the loan.
Due on Sale:
Such a condition does not allow assumption by another party. If the property is transferred in violation of the loan documents, the loan must be paid in full. Know More..
If the mortgage is in your name and you transfer the ownership to a single-member LLC, you cannot get the mortgage interest recorded in the LLC's EIN number. For that, the loan also has to be transfered in the name of the LLC and the single member can do it by refinancing the mortgage in the LLC's name.
If the transfer is from you as an individual to you as a single-member LLC, then it is not required because you can treat this LLC as a disregarded entity (since you are the only member of the LLC) with no change in how the mortgage interest is reported for getting tax benefits.
Alex12 Guest
Posted: Wed Oct 17, 2007 11:02 am Post subject:
Marie, as far as I can understand, one has to have the home in his name and also the loan, in order to qualify for tax deduction benefits (for itemized deduction only) on mortgage interest. In your case, if you are transferring property to single member LLC, then the loan should also be transferred in the single member's name. Or else, he cannot get the tax benefits.
However, if the single member is none but you, then there need not be a loan transfer. The LLC will be taken as disregarded entity and being its single member, you can avail tax benefits in your individual name only. In such a case, it doesn't matter if the interest is reported in your individual name and not that of the EIN number.
Lettie Guest
Posted: Thu May 28, 2009 9:44 pm Post subject: assumption clause
Hello,
My husband and I bought my family home (duplex) from my elderly father several years ago and have been renting it out to relatives. We no longer want to assume the mortgage and are considering transferring the property and mortgage to our relatives. Where do we begin and what happens if our lender will not allow this?
We deal with a Credit Union instead of a bank? Living in Wisconsin
Probably you can give them a quite claim deed and your relative can refinace. Make sure all this happnes in parallel.
Queena Guest
Posted: Mon Jun 15, 2009 10:53 am Post subject: house
My mother in law has our house in her name , but we want to change it in our name. We have made every payment since the house has been bought, but her homestead is another location to where she let go and they foreclosed on it and it has back paid taxes. How can we get our home in our name before they cease assets
Smokey Guest
Posted: Wed Aug 19, 2009 9:38 am Post subject:
Me and my significant other are splitting up. We have decided to sell the house. We are both on the title and morgtage. My significant has agrred to live in the home, make the payments, assume the loan until the home sells. We have agreed to split the profits once home sells. She doens't want to refinance in her name, and we agree that she could assume the loan. I was thinking of filing a quitclaim deed taking my name off, and she was going to assume the loan. Is this a good idea and or what would be your suggestion.
Helaine Guest
Posted: Mon Nov 09, 2009 9:31 am Post subject: Quit Claim Deed
Quit claim deed-ed father's property...loan is in his name...could be going into foreclosure soon but need to know if that will affect my credit in any way or what happens if foreclosed?? Sign over quit claim deed??
Assuming a mortgage seems like a good way of negotiating a better sale price as well. If you were to assume the existing owners mortgage and just pay them the difference between the sale price and their mortgage it represents a very simple transaction from the sellers point of view. _________________ Dallas Mortgage Refinance Quotes Low Rate Mortgages and Refinance Mortgages in Las Vegas Nevada
Lovely01CA Guest
Posted: Tue Dec 22, 2009 10:51 pm Post subject: Reverse Mortgage
My parents had a reverse mortgage. They both have died this year. Does the property have to go to probate or can I just sell it.
Sam
