What are the pros and cons by selling your home by way of an assumption loan?

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Looking to sell our home. Realtor is telling me that one way to sell is to having someone assume the loan. Sounds too easy. Are their any catches the seller must look out for? Or are their any hidden flaws that could come back to haunt the seller because the seller elected to get out of his mortgage by having the loan assumed?

7 Comments
  1. Reply
    Jin Hayashi
    August 11, 2013 at 6:00 am

    Depends on your loan

    Check with your lender before trying to do a assumption most lenders prohibit them

    Assuming loan will still leave you liable for future debt on the buyers behalf if they default

    The bank can cause a due on sale and demand the mortgage be paid off fully

    I personally do not recommend assumptions loans

    They are time consuming and too much liability

    Consider a short sale

  2. Reply
    kemperk
    August 11, 2013 at 6:17 am

    “the only way” is false.

    it is not easy

    the fastest way to get max $ is to offer a lease option to buy

    can guide further

  3. Reply
    linkus86
    August 11, 2013 at 7:06 am

    It depends on the type of loan and not many types of loans are assumable in the first place. I suggest speaking to your lender before moving forward with this idea. Let your Realtor market your property, not advise you on finance.

  4. Reply
    mildred f
    August 11, 2013 at 7:31 am

    Think this just sounds too risky. So even if the new owners qualify, you do know that things can happen. So it makes it your problem again. Best to completely get out.

  5. Reply
    realtor.sailor
    August 11, 2013 at 8:17 am

    You had better find another Realtor. He/she should know that most (if not all) residential mortgages are not assumable. If you were to go through with such a purchase, when the mortgagee learns title has been transferred, they have the option of calling the loan due.

    realtor.sailor

  6. Reply
    teran_realtor
    August 11, 2013 at 9:17 am

    However you sell your home – tell the Realtor that he gets his commission when you no longer have your name on a loan for that house.

    That way – the Realtor has a stake in the completion of whatever he’s telling you is OK to do. If it’s a wrap, or assumption, or lease option, or lease purchase, or contract for deed – WHATEVER he wants to call it – make sure he doesn’t get his money until you are out of the responsibility for that house.

  7. Reply
    Lisa L
    August 11, 2013 at 9:20 am

    FHA & VA loans are assumable to qualified buyers. They must still go through a lender to do this. You do not have to be a Vet to assume a VA loan. At closing the seller must be sure to get a release from liability. In 20 years of mortgage lending I have done one VA assumption, never an FHA. With rates as low as they are now buyers are better off getting a new loan.

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