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.
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.
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 father passed away earlier in the year- no will, but I am his only child. I am going through the process of getting the deed put in my name and I am the executor on the estate. I would like to make a simple assumption on the loan. I realize that I would then be liable. However, since I am the person making the assumption and making the payments I would like to know exactly how I would be held liable if I were to default. Since my name is on the deed, would the mortgage company just foreclose on the estate or would I have to actually pay the balance that is left on the mortgage ($21,000) if I defaulted?
Thanks
Thanks
hi anonymous!
as the property will be in your name, the lender may ask you to refinance the loan. if you assume the loan and default on it, the mortgage company can easily foreclose your property. your property will be sold and the lender will try to recover the debts. if the debt is not fully recovered then, the lender may either place lien on your other property or will ask you to immediately pay him the dues.
thanks.
as the property will be in your name, the lender may ask you to refinance the loan. if you assume the loan and default on it, the mortgage company can easily foreclose your property. your property will be sold and the lender will try to recover the debts. if the debt is not fully recovered then, the lender may either place lien on your other property or will ask you to immediately pay him the dues.
thanks.
My sister recently moved out of state; however she was buying a home and wants my husband and I to assume the notes. I don't want to get in this home and not have it in my name and put the work into it and she decides that she wants it back now that it is fixed up. WHat can I do to protect what I have done and get the necessary paperwork in place.
Hi TIffany!
Do you and your husband have documents stating that you own the property? If yes, then your sister will have no claims to it. But if there is no such documents, then I am afraid that you will lose the property.
Thanks.
Do you and your husband have documents stating that you own the property? If yes, then your sister will have no claims to it. But if there is no such documents, then I am afraid that you will lose the property.
Thanks.
can a loan be assummed if the owner has passed/deceased and the property has been willed to you, but you creit is marginal?
Hi weewee!
When you will be assuming the loan, the lender will check your credit. If your credit is not good, then there are chances the lender will not agree for a loan assumption.
Thanks.
When you will be assuming the loan, the lender will check your credit. If your credit is not good, then there are chances the lender will not agree for a loan assumption.
Thanks.
My mom die and she will the house to me. but I have bad credit can I still get the house with her loan.
Hi biker lady!
You haven't mentioned your credit score. FHA offers loan to people who have a credit score of 580. But again there are various criteria to get the loan. If there are any late payments or unpaid collections in the last 1 year, then there are no chances of getting a loan.
This community also has a number of lender who may provide you a no-obligation free mortgage consultation. You can speak to them about your situation. There are also some lenders who will offer you a free consultation to improve your credit.
Thanks
You haven't mentioned your credit score. FHA offers loan to people who have a credit score of 580. But again there are various criteria to get the loan. If there are any late payments or unpaid collections in the last 1 year, then there are no chances of getting a loan.
This community also has a number of lender who may provide you a no-obligation free mortgage consultation. You can speak to them about your situation. There are also some lenders who will offer you a free consultation to improve your credit.
Thanks
My dad recently passed and he willed the property to me but there is a les pedens on the property. Do you know if the mortgage company will complete the assumption of the loan into my name if there is the legal issue on the property? The property is already deeded in my name.
Hi Guest,
The lender may have issues in completing the loan assumption with you considering the fact that there is a legal issue with the property. You can try to clear off the les pendens as soon as possible and then try assuming the loan. Moreover you should also inform the lender about the les pendens on the property. If you do not inform and if the lender comes to know about it later on, he may penalize you.
Thanks
The lender may have issues in completing the loan assumption with you considering the fact that there is a legal issue with the property. You can try to clear off the les pendens as soon as possible and then try assuming the loan. Moreover you should also inform the lender about the les pendens on the property. If you do not inform and if the lender comes to know about it later on, he may penalize you.
Thanks
Thanks for the note. The other option is to pay off the mortgate. I would assume there would not be any issues with paying off the mortgage with the Les Pedens. Please let me know your thoughts. Thanks!
Hi Guest,
Does your lender know that there is a lis pendens on the property? In my opinion you should first inform the lender about it. I think the lender will have no problems if you are paying the mortgage payments.
However, if the person placing the lis pendens files a "Withdrawl of Notice of Pending Action" and records it at the county recorder's office, then you will be able to assume the loan.
Thanks.
Does your lender know that there is a lis pendens on the property? In my opinion you should first inform the lender about it. I think the lender will have no problems if you are paying the mortgage payments.
However, if the person placing the lis pendens files a "Withdrawl of Notice of Pending Action" and records it at the county recorder's office, then you will be able to assume the loan.
Thanks.
When a subject to existing mortgage is completed, I understand the new buyer is not obligated for the note but the seller still has obligation and is still responisble for payment. My question is for the seller debt-to-income. Is the mortgage payment still included in his DTI and could prohibted them from purchasing anything late. Can the Seller qualify for new loan without counting this mortgage debt.
THE RESPONSE HAS NOTHING TO DO WITH MY ORIGINAL QUESTION.
Hi builder
As far as I know, if the seller has the mortgage in his name and the payments are done in the seller's name, then the mortgage will be calculated in the seller's debt to income. This mortgage debt will be counted when the seller will try to qualify for a new loan.
Thanks.
As far as I know, if the seller has the mortgage in his name and the payments are done in the seller's name, then the mortgage will be calculated in the seller's debt to income. This mortgage debt will be counted when the seller will try to qualify for a new loan.
Thanks.