Posted on: 12th Jan, 2010 03:37 pm
what is the difference between a formal assumption and a non-qualifying assumption. I want to put grandson, who is living in the residence and works, on my prop in WA, through a simple assumption. Wells Fargo could not explain the difference to me.
Hi swampwitch,
In a non-qualifying assumption, the lender does not check your credit and income. You can have your name added to the loan without having to go through credit and income check. On the other hand, in a formal assumption, the lender will run a credit and income check before allowing you to assume the mortgage.
If you want to put your grandson on the property, you need to sign a quitclaim or a warranty deed deed as a grantor and transfer the title to both you and your grandson as grantees. This will add his name on the title. However, to add his name on the mortgage loan, a simple assumption (either qualifying or non-qualifying) will be required.
In a non-qualifying assumption, the lender does not check your credit and income. You can have your name added to the loan without having to go through credit and income check. On the other hand, in a formal assumption, the lender will run a credit and income check before allowing you to assume the mortgage.
If you want to put your grandson on the property, you need to sign a quitclaim or a warranty deed deed as a grantor and transfer the title to both you and your grandson as grantees. This will add his name on the title. However, to add his name on the mortgage loan, a simple assumption (either qualifying or non-qualifying) will be required.
assumptions are likely to be hard to get. in this economy, in this mortgage marketplace, in this new decade, i think you'll find them to be a real rarity.
and for non-qualifying, a lender would be most foolish to provide the opportunity for someone to assume a mortgage without checking credit and income. that's too easy for a borrower to commit fraud.
and for non-qualifying, a lender would be most foolish to provide the opportunity for someone to assume a mortgage without checking credit and income. that's too easy for a borrower to commit fraud.
oh yeah...and also a good way for a lender to lose a lot of money on a loan.