Mortgage Assumption

0.10 Dollars($)

My wife and are building a new home that should be completed by early fall. If our current mortgage is assumable, and a relative assumes the mortgage. Does this remove all of our responsilibilites regarding this mortage?

Niicss · Posted: Mon Jun 16, 2008 4:47 am Post subject:

Welcome Guest.

You are absolutely right. If your relative assumes the mortgage then you will not have any responsibility regarding the mortgage. The buyer actually takes over the responsibility of repaying the loan if you have a Assumption clause. So is your relative going to buy the property from you?

By the way if you want to know more about Mortgage Assumption clause, you can have a look at http://www.mortgagefit.com/assumption.html

Hope this helps.

Good luck.

brian1 · Posted: Mon Jun 16, 2008 11:55 am Post subject:

Make sure you go through the correct paperwork with the loan. The lender in most cases will still want to approve whoever is assuming the loan. Once that is done then yes you are off the hook.

Good Luck
Brian

gmakerley · Posted: Mon Jun 16, 2008 12:55 pm Post subject:

wrong...a new buyer assuming a mortgage does not eliminate your responsibility for payments. your name is still on the loan note. you are still obligated to make payments, no matter that someone assumed it. that means that your relative could make payments for 5 years, but if one is missed, you'll be on the hook for it.

and brian is correct in saying that your lender must approve your buyer to allow them to assume your mortgage.

assumable mortgages are not such a wonderful thing to have.

brian1 · Posted: Mon Jun 16, 2008 1:04 pm Post subject:

I had to go back and look at the guidelines and George is correct. The original borrowers obligations are not eliminated. I guess I "assumed" they were.
Doesnt make much sense why would anyone ever use this option?
So few loans have that option it isnt something we see.

Guest 0.10 Dollars($)

Thank you that helps us with our decision. We thought that maybe throug assumption we could save them some closing costs. I guess well do it the old fashion way.. thanks again...

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