Questions regarding assumable mortgages.
My sister-in-law received some excellent news recently. She got into her "reach" graduate school - a school she had no expectations of getting into. Unfortunately, she and her husband just purchased a home three months ago based on the assumption that she would be attending Gonzaga. The school she got into is so good that it would be crazy to turn it down. One option she & her husband are considering is having someone assume their mortgage. They do not expect to receive their down payment back.
They have a FHA loan that is assumable, but have received conflicting information about terms, conditions, and costs.
Specifically, will they have to pay sales and excise taxes (Washington state) if a buyer assumes the mortgage?
Will the buyer's closing costs still run 4-6k on the 200k home?
Most importantly, does the HUD 92210 form truly release them from liability in case the buyer defaults on the mortgage?
Thank you in advance!
Dear Cassellis,
Your sister will receive the best information from her lender. They will need to approve those who are to assume the mortgage. Those who originally purchased the home become secondarily liable; the person who assumes the mortgage is primarily liable to repay the debt.
Denise
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