Loan Assumption Agreement
About this form
The Loan Assumption Agreement is a legal document that allows a grantee (purchaser) to take over an existing loan from the grantor (seller). This agreement is essential in situations where the property owner wishes to transfer their property along with the responsibility for the mortgage. By using this form, the grantee agrees to assume the existing lien and the monthly loan payments associated with the property, which can differ from a typical purchase agreement where the buyer secures a new loan.
Main sections of this form
- Date of the agreement.
- Identification of the parties involved: Grantor and Grantee.
- Description of the property being transferred.
- Details of the existing lien and loan, including debt amount and payment terms.
- Consent conditions from the lender regarding the assumption.
- Notarization section for witnessing signatures.
When this form is needed
This form is typically used when an individual or entity intends to purchase property and also wants to take over the existing mortgage. For instance, if the property seller is unable to continue making payments but the buyer agrees to assume the loan, this agreement ensures a smooth transition and compliance with lender requirements. It is crucial in real estate transactions involving assumable loans.
Intended users of this form
- Property sellers (grantors) who wish to transfer their mortgage obligations.
- Buyers (grantees) who are assuming the existing loan on the property.
- Real estate professionals facilitating a property transfer involving an assumable mortgage.
Instructions for completing this form
- Identify the date of the agreement and enter it in the designated space.
- Name both parties involved in the transaction: Grantor and Grantee.
- Clearly describe the property being transferred, including its location.
- Fill in the details of the existing loan, including the debt amount and monthly payment.
- Indicate whether lender consent is required for the assumption.
- Both parties should sign in the presence of a notary public for validation.
Does this form need to be notarized?
Yes, this form must be notarized to be legally valid. Notarization helps to verify the identities of the parties and the authenticity of the signatures. US Legal Forms provides integrated online notarization services, making it convenient to complete the signing process through secure video calls, available 24/7, ensuring legal equivalence without the need for travel.
Typical mistakes to avoid
- Failing to include the correct property description.
- Not obtaining necessary consent from the lender when required.
- Leaving sections blank or inaccurately filling out loan details.
- Not having the agreement notarized, where required.
- Neglecting to keep a copy of the signed agreement for personal records.
Advantages of online completion
- Convenient access to a professionally drafted agreement.
- Editable fields allow for customization based on specific transaction needs.
- Instant download capability ensures quick processing.
- Designed to comply with standard legal practices to enhance reliability.
Form popularity
FAQ
A fee that the buyer of a property with an assumable mortgage pays to the lender for the ability to take over the mortgage.
An assumable mortgage allows a buyer to take over the seller's mortgage. 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. If you assume someone's mortgage, you're agreeing to take on their debt.
Keep in mind that the average loan assumption takes anywhere from 45-90 days to complete. The more issues there are with underwriting, the longer you'll have to wait to finalize your agreement. Do yourself a favor and get the necessary criteria organized in advance.
If the assumable interest rate is lower than current market rates, the buyer saves money straight away. There are also fewer closing costs associated with assuming a mortgage.The seller may also benefit from using the assumable mortgage as a marketing strategy to attract buyers.
An assignment and assumption agreement is used after a contract is signed, in order to transfer one of the contracting party's rights and obligations to a third party who was not originally a party to the contract.The assignee must agree to accept, or "assume," those contractual rights and duties.
An assumable mortgage is a type of financing arrangement whereby an outstanding mortgage and its terms are transferred from the current owner to a buyer. By assuming the previous owner's remaining debt, the buyer can avoid having to obtain their own mortgage.
An assumable mortgage allows a buyer to take over the seller's mortgage. 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. If you assume someone's mortgage, you're agreeing to take on their debt.
The seller may also be required to sign the assumption agreement and the terms may release the seller from responsibility. The lender usually requires a credit history from the buyer before approving the assumption and the payment of assumption fee(s).
