Assumption

An Assumption is when a Buyer of a property assumes the existing owner's debt without getting new financing.

A Mortgage must be assumable or otherwise transferable for a Buyer to assume a seller's obligations.

An Assumption must be approved by the Seller's existing lender to whom the debt is owed, and it must be held as permissible under the terms of the existing note.

A mortgage is assumable if it does not carry a "due on sale" clause.

Most VA home loans are assumable.

Most FHA loans are assumable.

Most lenders will not allow the loan to be assumed.

All Va loans created before March of 1988 are assumable by anyone regardless of their credit.

An assumption occurs when a buyer of a property takes over the existing owners debt and retains the debt instrument.

Commercial loans, particularly conduit loans, can generally be made assumable for a point or two at assumption.

In a market with flat real estate values and rising interest rates, assumable mortgages can help to sell a property.

» DISCLAIMER: The information contained in this article on 'Assumption' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.