Qualified Loan Assumptions
Updated: Jan 13, 2022
A Loan Assumption clause is a provision in a mortgage contract which allows the seller of a home to pass responsibility for the existing mortgage on to the buyer of the property. In other words, the new homeowner assumes the existing mortgage. In other words it allows one to legally remove themselves from the mortgage "NOTE" and Transfer it to someone else without the process of an actual "Sale".
What does it mean to Assume a Mortgage Loan?
Assuming a loan means taking over the seller's mortgage and continuing to make the payments on it. Quite literally you'll assume the loan as is at the exact terms and obligations. Most loans can't be assumed, because the banks won't allow it. Assumptions are available only on FHA and VA loans, which are the minority. Some, not all Conventional (Fannie & Freddie) loans may be Assumable.