Assuming mortgage without paying full note amount

3 Replies

When owner of a property Quit Claims a property to you so the title is in your name and you assume the mortgage payments, how can you minimize or avoid the possibility of the bank calling the note to be due immediately?

Originally posted by @Brad Deffenbaugh :

When owner of a property Quit Claims a property to you so the title is in your name and you assume the mortgage payments, how can you minimize or avoid the possibility of the bank calling the note to be due immediately?

Don't count your chicks before they hatch as the bank will find out eventually. It's just a matter of time as they are the lienholder on that property. You also might want to try to secure a better title than quit claim which is at the bottom of the barrel. What's your plan to profit on this deal: lease/option, long-term rental? 

Kudos,

Mary

My understanding is quit claim deeds are completely useless in TX.  You can certainly do a subject to purchase with a better deed than that, at least her in CO.  I've seen samples.

How can you be absolutely sure the lender won't call the note?  You cannot.  Be prepared to refinance or sell if that happens.  And do not make any promises to the seller it won't happen.  In fact, be sure the seller is very aware of the risk and that you have statements from them, in writing and signed, that lists the risks and states they understand them.

And, "assume" is the wrong word.  The only way to assume a mortgage is to get formal approval from the lender.  Few mortgages allow this.  So, avoid this term as it means something that doesn't apply in your situation.

Mary - thanks for your input. do you have any advice on securing a better title? My strategy in this case is to do a lease option.

Jon - you said also to be prepared to sell if the bank calls the note due...do you know the typical timeline they give to come up with funds to pay (2 days, 2 weeks)?

I appreciate both of you leaving your input in this matter. It is great to connect with you!!!

Thanks,

Brad

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