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.
The North Carolina General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legally binding document used in real estate transactions within the state of North Carolina. This agreement outlines the terms and conditions under which a buyer will assume the existing mortgage or deed of trust associated with the residential property being sold. Keywords: North Carolina, general form, agreement of sale, residential property, assumption, existing mortgage, deed of trust There are variations of the North Carolina General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust, which include: 1. Purchase Price: This section specifies the agreed-upon price at which the residential property will be sold. 2. Assumption of Existing Mortgage or Deed of Trust: This clause outlines the buyer's responsibility in assuming the existing mortgage or deed of trust associated with the property. 3. Title Examination and Insurance: This section covers the buyer's right to perform a title examination and secure title insurance to ensure the property's legal ownership. 4. Conditions of Sale: This part outlines any specific conditions that must be met by the seller or buyer for the sale to proceed, such as repairs or inspections. 5. Financing: This clause relates to the buyer's method of financing the purchase, whether through a mortgage, cash payment, or other means. 6. Prorations: This section discusses the allocation of expenses, such as taxes and utilities, between the buyer and seller before and after the closing of the transaction. 7. Closing Costs: This part specifies who is responsible for paying the various closing costs associated with the sale, such as attorney fees, title search, and decoration charges. 8. Default and Remedies: This section outlines the consequences of default by either party and the available remedies, such as termination of the agreement or specific performance. 9. Disclosures: This clause requires the seller to disclose any known defects or issues with the property, ensuring full transparency to the buyer. 10. Contingencies: This part allows for the inclusion of contingencies, such as inspections, appraisal, or mortgage approval, which must be met for the sale to proceed. It is important to note that the exact content and structure of the North Carolina General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust may vary based on individual circumstances, legal requirements, and any amendments or additions made by the parties involved.
