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Bob Paxson
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Assuming a mortgage questions

Bob Paxson
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Posted Jan 5 2023, 14:35

Assuming a mortgage questions anyone have experience doing it any help would be appreciated….

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Chris Seveney
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Chris Seveney
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Replied Jan 5 2023, 15:51

@Bob Paxson

In process of assuming one now from a seller financed deal

What questions can I answer ?

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Bob Paxson
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Bob Paxson
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Replied Jan 5 2023, 16:10

Well have a deal with a husband he is only one on deed/title…wants out of property …they just got a divorce ….I want to assume the mortgage… take over payments put my name on deed take his off  what are the odds due on sale clause will be triggered by lender ? Should I get a lawyer to draw up the agreement… it seems simple to me am I missing something

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Brett Merrill
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Brett Merrill
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Replied Jan 5 2023, 16:23

Hi @Bob Paxson I have seen it work successfully many times with a good attorney in place and proper communication with the lender.

The due on sale clause of a mortgage allows the lender to call the mortgage due and payable in full when the property transfers ownership. If you are trying to assume a mortgage, you should be aware of the due on sale clause and the impact it can have on the process.

Some lenders may choose to allow an assumption of the mortgage without calling the loan due and payable if they are satisfied with the financial situation of the new borrower. Others may be unwilling to allow the assumption of the mortgage if they feel the new owner cannot afford to make the payments.

It is important to understand the requirements of the lender before attempting to assume a mortgage. If the lender has a due on sale clause in place, it may not be possible to assume the mortgage without calling it due and payable in full. You should discuss this with the lender to ensure that you understand the impact this clause can have on your ability to assume the mortgage.

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Harjeet Bhatti
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Harjeet Bhatti
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Replied Jan 5 2023, 17:39

@Bob Paxson There is divorce involve in transaction. You should involve attorney. Attorney will need divorce settlement to understand who has ownership of the property. 

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Wayne Brooks#1 Foreclosures Contributor
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Wayne Brooks#1 Foreclosures Contributor
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Replied Jan 5 2023, 18:23

@Bob Paxson To be clear…

- when you “assume” a loan, it is with the lender approval and you have to qualify for the loan just like if you were getting any other mtg.  The original borrower is removed from the loan and replaced with you, you get title of course, no due on sale issue.

- when you buy “Subject To (sub to)” you are making the payments on the original borrower’s loan, it stays in his name, is done without lender approval, title goes in your name and yes you have a due on sale risk, however small…..Terribly risky deal for the seller.

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Bob Paxson
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Bob Paxson
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Replied Jan 5 2023, 18:50
Quote from @Wayne Brooks:

@Bob Paxson To be clear…

- when you “assume” a loan, it is with the lender approval and you have to qualify for the loan just like if you were getting any other mtg.  The original borrower is removed from the loan and replaced with you, you get title of course, no due on sale issue.

- when you buy “Subject To (sub to)” you are making the payments on the original borrower’s loan, it stays in his name, is done without lender approval, title goes in your name and yes you have a due on sale risk, however small…..Terribly risky deal for the seller.

That is what I was looking for that helps a lot 

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Bob Paxson
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Bob Paxson
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Replied Jan 5 2023, 18:53
Quote from @Harjeet Bhatti:

@Bob Paxson There is divorce involve in transaction. You should involve attorney. Attorney will need divorce settlement to understand who has ownership of the property. 

The property is only in the husbands name

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Bob Paxson
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Bob Paxson
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Replied Jan 5 2023, 18:54
Quote from @Harjeet Bhatti:

@Bob Paxson There is divorce involve in transaction. You should involve attorney. Attorney will need divorce settlement to understand who has ownership of the property. 

The property is only in the husbands name

  he just wants out