Profile picture for ronajackson

I want to sell my home, for someone to take over my Interest rate & mortage.

  • November 16 2010 - Cape Coral
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Answers (11)

A contract for deed WOULD be the best option because you don't give title up until the buyer pays you off.  

There's probably a "due on sale" clause in your mortgage which allows the lender, if they choose, to accelerate the loan (make you pay it off). When you do a contract for deed, the chances are 1 in 1000 the lender will find out, and 1 in 10,000 that they'd care.  It's not breaking the law by wrapping a loan, it's simply a contract clause that gives the lender the OPTION to call it due.  In other words, the loan is NOT due on sale unless the lender wants to push the issue, which is VERY unlikely unless your loan is 4% and market interest rates are 9%.

By the way, a contract for deed wrapping a VA loan does NOT trigger the due on sale.  The VA loan regs manual specifically says that a transfer without a deed change is not a "sale".
  • September 21 2013
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Before  you make the mistake of having someone assume your loan, please talk to an attorney , ask for advise.
 There are not many assumable loans FHA and VA will let their loans to be assumable. Conventional loans are not assumablewith out the consent of the lender , the buyers have to apply and qualify for their own loan.
  • December 19 2011
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Have you checked with your lender to see if they will allow this first?
  • December 13 2011
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Profile picture for sunnyview
Doing an assumption is very different than doing a wraparound mortgage. In most cases, it is not a great idea unless you can get your name taken off the mortgage completely or have a substantial deposit.

Many people who try to do a "wrap" do not have the new buyer assume the mortgage formall and instead leave their name on the property. This is a risk to the owners credit, a risk the the condition of the house and can be very risky to the owners credit if the buyer stops paying or pays late.

Anyone considering a wrap needs to get very specific legal advice before they do so they understand all the pitfalls before jumping in.
  • November 11 2011
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Hi Ronajackson,
This is a great idea, if its' possible.  If not- you may have other options.  The important idea is for you to determine what you want to get out of someone taking over your mortgage.  My suggestion is that you contact a professional Realtor, or several - to make an estimation of market value and strategize as to how you can achieve your end goal, whether that is to stay in the home as a renter, move or relocate, sell outright,or even lease option the home to a prospect.  Either way - it sounds like you need assistance and should reach out to get further information!
  • November 10 2011
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Profile picture for sunnyview
My understanding was the modern mortgages were not exactly "assumable" and the the new borrower had to be able to qualify for the loan on their own merit. I also thought that mortgages were assumed without that happening could be called due and payable by the bank.

You might look into HARP if you need to lower your payment. It might allow you to stay in your house for a lower payment.
  • November 09 2011
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Mortgage assumption is primarily based on the prospective borrowers credit worthiness.  Lenders will make concessions if credit is strong.
It would benefit you more to obtain a payoff, especially if you owe more then it's worth. Some lenders are making adjustments for the borrower, to keep defaults down.  If lender likes the borrowers credit for this property, they will find a way to make it work. It's all about the loan portfolio.

  • November 09 2011
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Profile picture for wetdawgs

Is your mortgage for more than the house is worth?  If so, even if the mortgage is assumable, you aren't going to find someone to take it over.    Is your mortgage at an interest rate competitive with today's rates?   If not, you also won't find someone willing to take it over.

  • November 16 2010
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Check with your lender to see if your loan is assumable.
  • November 16 2010
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The only mortgages with an assumption clause are VA mortgages anymore.  John made some very good suggestions.  Are you able to sell the home and make a profit or break even? 
  • November 16 2010
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This would be most likely considered an assumption.  However, many recent mortgages are not assumable.  You are probably asking this because your buyer hasn't credit to get a mortgage on their own, and therefore wouldn't have credit for an assumption.

A "Contract for Deed" wouldn't be an option because most mortgages have a due on sale clause, which means you must satisfy the mortgage on the sale of the property.

Your best bet then would have an attorney draft a "Lease to Own" agreement.  Add an acceleration clause that allows you to immediately foreclose on the property without legal involvement, if the lessee defaults on your agreement. 
  • November 16 2010
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