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SIMPLE ASSUMPTION OF A LOAN

Author: Jessica Bennet
Community Mentor
Ask Jessica
Posted on: 12th Nov, 2005 11:33am
Simple assumption is a process by which a buyer assumes or takes over the seller's mortgage obligation. But this doesn't mean that the seller is release from the liability. That's the reason, simple assumption is also known as transfer with no release of liability.


When you assume a loan and default, the original seller is secondarily responsible for paying off the unpaid balance. And the lender cannot seek a deficiency judgment against the original borrower if he fails to recover the unpaid debt by selling the home.


If you assume your parents' loan, they are not completely released from the liability and hence the loan payments will be reflected in their credit reports and not yours. However, if you default, then your parents' credit report will reflect an outstanding mortgage and it will be difficult for them to seek any other loan.
Posted on: 12th Nov, 2005 11:33 am
yes, can u tell me more about simple assumptions and what does it mean transfer with no release of liability? my parents made a mortgage for me to buy a home 4 years ago. i paid the notes. they have passed away and the property and double wide home was willed to me. we done a assumption of the loan with our morgage comp. and lawyer 4 months ago. my main concern right now someone told me that this will not go on my credit. the loan co. says it is only in my name that my parents names have been removed. can you tell me anything about this.I am tring to rebuild my credit and i feel having a mortgage and keeping the payments up will help improve it. is there something i can do? any information would be helful. thank you
my house was sold on a assumptian deal 4 years ago all payment made on time since does that mean i cant buy a house of my own?
Posted on: 01st Nov, 2007 06:52 pm
Hi,

I think you can qualify for a new mortgage even after selling your house on an assumption deal.

Lenders generally look for your credit report and debt-to-income ratio.
Posted on: 02nd Nov, 2007 02:36 am
Hi Jason,

Your house was sold on a assumption deal 4 years ago. I hope now you have gain good credit score. So if your credit report is good, you can surely qualify for the mortgage.

Thanks,
Larry
Posted on: 02nd Nov, 2007 03:27 am
my boyfriend and i live together in a house that i bought from my mother's estate. My lawyer prepared the papers for my boyfriend to sign which states that he does not have any claims on my home, and when presented with a quit claim he is to comply to signing off of any interest in the house, my concern is that he is the mortgage holder, once he is off of the deed will the mortgage come to me, which would be fine
Posted on: 06th Jan, 2008 01:59 am
Been reading this page; simple assumptions vary from lender to lender not to mention the type of mortgage your in. I think people are confused with other types of assumptions. So far i have ran into three and one of them is what works for me.

An existing va backed mortgage without refinancing; using a simple assumption to put my wife on it as secondary; not primary; for 50 bucks. No refinancing; no other type of loans; va mortgage stays the same; me as primary her as secondary for 50 bucks. I've had the va backed mort. Thru a major lender (the second one) since 1999. This is a great deal and break. No refinance; no non va backed mort. And no other conventional mortgages; nothing changes except the wife is the secondary; not the primary and as long as i live we get the prop. Tax break; if i go; she has one on file and gets the same. My dic will cover her payments. These discussions are hard to follow due to the infinite variables. I just went nuts as of this date jan, 7, 2008 found the right person after a month of phone tag and it's a piece of cake. Now i can move on to wills and such. Semper fi!

[Modified as per forum rules]
Posted on: 07th Jan, 2008 03:50 pm
hello skydust,

i think it will be better if you consult your lender before you do a quit claim deed. because the lender might call the entire mortgage balance due immediately if there's any change in the property ownership or else he might not give his consent to remove the primary borrower's name from the title of the property.

if you are willing to take the mortgage in your name then you have to refinance the loan in your name but that will be possible only if you qualify for it.

i think it is important for you to talk to your lender before you do anything else.
Posted on: 08th Jan, 2008 04:33 am
This forum has cleared most of my doubts about simple assumption.
Posted on: 02nd Jun, 2008 09:16 pm
CAN A PERSON USE THEIR RRSP'S AS A DOWNPAYMENT ON CASH TO MORTGAGE WHILE ASSUMING A MORTGAGE OR IS THIS STRICTLY CASH.
Posted on: 24th Jul, 2008 02:31 pm
Hi Guest.

Welcome to the forum.

You can use your Retirement Savings Plan to pay the down payment but I don't think it is a good move to eat up the Retirement Savings account.

Best of luck,
Larry
Posted on: 25th Jul, 2008 06:22 am
my father died with a mortgage balance left on the house. it is our family house that i grew up in. my brother does not want any parts of the house, so i have been making the payments in order to prevent the bank from forclosing on the property. can i get then morgage loan transfered in my name and if so, do i have to refinance the balance in order to do this?
Posted on: 30th Jul, 2008 11:57 am
Hi unknown,

You will have to refinance the current mortgage balance so that you have your name on the loan. Know more on refinance prior to going for it.

Thanks.
Posted on: 31st Jul, 2008 03:19 am
My divorce left liability and property to my ex. (We're still on good terms) The mortgage company says that we're both still responsible though. They wont remove me from the mortgage and his credit isn't good enough to re-finance. Assumption was mentioned as an option of removing financial liability from me, but reading here that doesnt sound right. Any other options?
Posted on: 27th Aug, 2008 06:25 pm
welcome beth.

novation may be another option but as your husband's credit is not good enough, the mortgage company may not agree to do the novation. but you can contact with the mortgage company and request then for the novation.
Posted on: 28th Aug, 2008 05:42 am
Do I need to file an assumption, a quit claim deed, or something else to have my name removed from the house loan with my ex-wife?
Posted on: 14th Oct, 2008 09:42 am
Hi mcav!

If you want to remove your name from the loan, then your ex-wife needs to refinance the mortgage in her name. Signing a quitclaim will not serve the purpose.

Thanks.
Posted on: 15th Oct, 2008 03:47 am
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