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Assumable Mortgage & Estate

I want to assume a mortgage. I this possible and how much will it cost?

My wife of 13 years passed away 4 years ago. The home loan was in her name only. I am currently the court appointed administrator of the estate. I would like to assume the loan. Is this possible and if so, what kind of cost would this mean to me.

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Highlights

  • Some mortgage contracts allow assumptions, others do not.
  • The cost of assuming a mortgage is small.
  • Whether a mortgage is assumable can be found in the mortgage contract.

An assumable mortgage is a mortgage that can be transferred from a seller to a buyer. Once the loan is assumed by the buyer the seller is no longer responsible for repaying it. There may be a fee and a credit check and approval process involved in the transfer of an assumable mortgage. The cost of assuming a mortgage is small in comparison to the cost of starting a mortgage from scratch.

A mortgage (or a deed of trust in states like Massachusetts and California) is a contract between the mortgage lender and the borrower(s). Although loan officers will use words like, "This is a standard contract," there is really no such thing as a standard contract. Each contract writer creates their own contract that is tailored to that writer's needs and the constraints of state and federal law. Some mortgage contracts allow assumptions. FHA-backed mortgages sometimes allow assumptions. Other mortgage contracts do not.

The real question is, "Does your contract allow assumptions?" I do not know. The answer to this question is found in the original mortgage contract. The phrase to look for is, "Assumption Clause."

If the assumption clause is unclear, then take the mortgage contract or deed of trust to an attorney who has experience in either contracts or property law. He or she will be able to give you an opinion in an hour or less.

If the mortgage is not assumable, then you will need to qualify for a mortgage. See the Bills.com mortgage page to learn more about how to qualify for a mortgage.

I hope this information helps you Find. Learn & Save.

Best,

Bill

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