Asked by: Maeve Bujacaasked in category: General Last Updated: 18th February, 2020
What is a loan assumption agreement?
Consequently, what is a loan assumption?
A loan assumption is a transaction in which a person (the “assumptor”) obtains an ownership interest in real property from another person and accepts responsibility for the terms, payments and obligations of that other person's mortgage loan.
One may also ask, does loan assumption hurt your credit? Assuming a mortgage will not hurt your credit any more than if you were to apply for a new loan – as long as you keep up with your regular mortgage payments and do not fall behind. You will, however, still need to find a lender and qualify before you are able to assume the loan.
In this regard, how does an assumption of a mortgage work?
When you assume a mortgage, you're taking over a mortgage payment from someone else while keeping the current terms of that payment intact. Once the assumption is complete, you take over the payments on a monthly basis, and the person you assume the loan from is released from further liability.
How do I get a loan assumption?
Request an application from the lender. In order to assume a mortgage, you must qualify with the current lender. Without the lender's consent, you cannot assume the mortgage. To start the process of assuming the loan, request the assumption package from the current lender. The seller should let you know who this is.