How do I Assume an Existing Mortgage?
When a mortgage loan is assumed, one party takes responsibility for a loan from another party. This is not the same thing as selling a property; the deed is not transferred during the loan assumption process. A mortgage assumption does not take in account the value of a property; it only takes into account the amount of a mortgage loan. Mortgage assumptions are most common in divorce cases and when an estate is settled after someone's death.
Instructions
1. Contact the bank that holds the mortgage and request a loan assumption packet. This packet includes paperwork to qualify you for the mortgage. A person assuming a loan must financially qualify for the mortgage and have the ability to make monthly payments.
2. Gather and make copies of financial paperwork--bank statements, the previous year's taxes and recent pay stubs.
3. Fill out the application packet and include copies of financial documents. This packet will also likely include a release for the person to sign that is relinquishing responsibility for the loan. In the case of settling an estate, include a copy of the death certificate. Depending on the mortgage company, you may need to include a deposit for the assumption. This deposit typically goes toward the cost of the home loan assumption, which varies by lender.
4. Wait for approval from the lender. This can take several days or weeks. Once the assumption is approved, pay the lender's fee and the mortgage company will send out documents and payment information in the new mortgage-holder's name.
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