Posted on: 01st Apr, 2004 02:25 am
Assumable mortgage is a process of selling a property which is already mortgaged. This would seem unlikely but is possible. There are 3 people involved in the transaction:
The buyer takes over the responsibilities of the mortgage. But sometimes the seller is liable to it as well especially in the case of default by the buyer.
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- Lender- who has given money against the collateral
- Seller- who is also the first mortgagor and holds the title of ownership of the property. He has an agreement with the lender.
- Buyer- second mortgagor who buys the already mortgaged property.
The buyer takes over the responsibilities of the mortgage. But sometimes the seller is liable to it as well especially in the case of default by the buyer.
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are there any risk for the seller of the house with a assumable mortgage?
Hi Mendeleev,
Welcome to Mortgagefit discussion board.
As a seller of the home you can remain liable for the mortgage even after it is assumed by the buyer. And if the buyer defaults on the payments, you would be responsible to the balance that the lender will not be able to recover from the person who assumed the loan.
Such a risk can be removed if the assumption is a qualifying assumption, in which the seller is relieved from the repayment of the loan after it is assumed by the buyer.
Thanks
Blue
Welcome to Mortgagefit discussion board.
As a seller of the home you can remain liable for the mortgage even after it is assumed by the buyer. And if the buyer defaults on the payments, you would be responsible to the balance that the lender will not be able to recover from the person who assumed the loan.
Such a risk can be removed if the assumption is a qualifying assumption, in which the seller is relieved from the repayment of the loan after it is assumed by the buyer.
Thanks
Blue