What is the Loan Assumption Addendum?

If you are considering completing a loan assumption with a mortgage, you will most likely have to deal with a loan assumption addendum. Here are the basics of the loan assumption addendum and why it is important.

Loan Assumption Addendum

Certain mortgages have the ability to be assumed by another buyer. When this happens, you can simply transfer a mortgage from one individual to another. The new individual would then take over the same exact monthly payment and mortgage balance from the original owner.

The loan assumption addendum is a piece of paperwork that will be provided to the individual that is assuming the loan. This paperwork is going to provide them with important information about assuming the loan and how the process will work.

Importance

The loan assumption addendum can provide important information to the person that is going to take over the mortgage. They will be able to see that the mortgage lender is going to require a credit check before they will be able to approve the assumption. They will also see if there are any fees that are associated with transferring the loan to another individual. Before you consider assuming a loan from another person, you need to make sure that you read the loan assumption addendum first.



Addendum



An addendum is an additional document that may be required by a mortgage lender during the process of getting approved for a loan. The addendum is basically an add-on to the original document so that an entirely new document will not have to be created by the mortgage company. When an addendum is used, the home buyer and a representative from the mortgage company may have to sign the new document so that it is known that both parties were aware of it. This is a tool that is commonly used when terms of the mortgage agreement have changed slightly. 

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