Home Selling in Grand Coulee>Question Details

Tera Mcguire, Home Buyer in Grand Coulee, WA

buyer cash out assume mortgage

Asked by Tera Mcguire, Grand Coulee, WA Mon Oct 13, 2008

We had an offer on our home cash out 20,000 and then take over the current mortgage balance, I just want to know the ins and outs of this and if it is as good as it sounds. Thank you

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good morning.......if you have an fha or va loan, it may be assumable if the buyer(s) is credit worthy....they have to apply with the lender and qualify for the loan they would be assuming....if they default on the mortgage anytime before it is paid off , even after qualifying for it, it is still your mortgage.....the late payments, and forelcosure would stil go on your credit report, even though there is release of liability for the remaining balance......also, if your mortgage is not assumable, and you go ahead with the transaction, it violates the "due-on-sale" clause in the mortgage and the lender (at their discretion) can accelerate and foreclose .......usually where it is caught is when the new buyer insures the home in their name.....the lender will be sent the copy of the revised declaration page showing the new owners...and it goes downhill from there...if you want to play it a little safer....have someone run your buyer's credit, and sell the home on land contract....use a local title co. and have a title committment issued with exceptions....that would be the acknowlegement of the underlying mortgage...laslty....that too techincally violates the due on sale clause, but it's like speeding....many people do it and very few ever get caught........i hope that helps......bob mcclure- mortgage now- farmington, michigan.....
Web Reference: http://www.applyLow.com
1 vote Thank Flag Link Mon Oct 20, 2008
For that to happen the mortgage would need to be assumable. That might be the case.

What did your Realtor say?

Is the price fair?

What do home like yours sell for in your area?

The bottom line is what is your home worth and are you receiving fair market value? A Realtor should be able to tell you.
0 votes Thank Flag Link Mon Oct 13, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
Scott is correct. You definitely need to check with your bank. Mortgages haven't been freely assumable for 20 yrs. If you are to be released from liability on your mortgage the buyer will have to do a complete substitution of liability which requires full credit underwriting. If the buyer is willing to go through that they may just as well apply for a new loan which would probably come with a lower interest rate anyway. I would question the buyer. If they don't have credit problems they should get a new loan. If they can't qualify you don't want them in your home with the chance of ruining your credit with a default.
0 votes Thank Flag Link Mon Oct 13, 2008
you need to check if your mortgage is assumable and if it releases you from the liability of having to pay it. Then are they making it directly or paying you and you are paying it. If you are still on the hook, and they stop making the payments, you wint know until it is foreclosed and your credit is ruined. good luck
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Oct 13, 2008
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