North Carolina General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust

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US-01679BG
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Description

An assumable mortgage is one which lets a buyer take over the existing loan of a seller. Assumable mortgages require the lender's approval. The person who assumes a mortgage takes the same interest rate and monthly payment schedule as the original loan, which can result in big savings if the interest rate on the existing mortgage is lower than the current rate on new loans. However, the lender can change the loans terms. The person assuming a mortgage still needs to qualify for the loan and pay closing fees, including the costs of the appraisal and title insurance.


The lender also holds the seller liable for the loan. For example, if the person assuming the mortgage defaults on payments and the lender forecloses, but the property sells for less than the loan's balance, the lender can sue the seller for the difference.


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  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust
  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust
  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust
  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust
  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust
  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust
  • Preview General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust

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FAQ

When a buyer acquires a property having an existing mortgage loan, a decision must be made as to whether or not the subsequent owner of the property can preserve the loan. If the buyer does not add his or her signature to the note, the buyer does not take on any personal liability.

A subject to mortgage will have the buyer take control of the property and make payments to the seller, who will then pay off the mortgage in their own name. A good subject to mortgage clause should be viewed by a real estate attorney before any decisions are made.

Assumption of Mortgage Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.

The main difference between a deed and a deed of trust is that a deed is a transfer of ownership, while a deed of trust is a security interest. A deed of trust is used to secure a loan, while a deed is used to transfer ownership of a property.

The most common residential offer form in North Carolina is the ?Offer to Purchase and Contract? (Form No. 2-T), jointly approved by the N.C. Bar Association and NC REALTORS®.

Loan assumption, however, allows a buyer to take over the current owner's mortgage while the loan's terms ? including the repayment period and interest rate ? remain the same. Ultimately, it can help people get into a home at a lower interest rate even as the housing market around them becomes more expensive.

The majority of the time a deed of trust is used in a real estate transaction in North Carolina, it will be a purchase money mortgage, or a mortgage issued to the borrower by the seller of the home as part of the purchase transaction, unlike a traditional mortgage which is obtained through a bank.

Right of redemption is a legal process that allows a delinquent mortgage borrower to reclaim their home or other property subject to foreclosure if they are able to repay their obligations in time.

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North Carolina General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust