3 Questions to Ask about Your Loan Assumption Clause

A loan assumption clause is included in many mortgages. It describes the terms in which another individual can assume a loan that is owned by someone else. If you are working with this type of mortgage, here are a few questions that you might want to ask about your loan assumption clause.

1. Is This a Simple Assumption?

When you are working with a simple assumption, the process of assumption is easier. The buyer of the property is not going to have to go through any credit checks, or prove that they make a certain amount of income. The seller of the property will be responsible for the mortgage until it is paid off.

2. Is This a Qualifying Assumption?

Another type of assumption clause is the qualifying assumption. With this type of assumption, the buyer of the property will have to go through a credit check process before they can qualify for the assumption. With this assumption, the seller of the property is released of liability once the loan is assumed.

3. Are There Any Fees Involved?

You will also want to ask the lender is there are any fees involved with someone else assuming the loan. This way, you will know what costs are going to have to come out of pocket in advance.

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