If you have not been able to make regular payments on your mortgage, then you can transfer the mortgage into somebody else’s name. This is referred to as the mortgage assumption which can help avoid a foreclosure. loanmoddepot.com can help you avoid a foreclosure by offering loan modification expert advice. Loan modification help makes the entire process much smoother for people seeking help with mortgage payments.
Mortgage assumption refers to a process where a new person can take up the responsibility of regular payments over mortgage. However, this involves property transfer and the one who purchases the property needs to make monthly payments and should comply with the terms of the existing loan. There would be no changes in monthly payments, principal balance and interest rate during the process.
Not all mortgages are assumable
If the contract clearly mentions that the mortgage is assumable then you can move ahead with the process of transfer to another person. If the contract is silent, then in several cases it can be considered to be assumable. Several lenders lay down constraints that the new owner should qualify for the mortgage and need to clear the approval process. Credit checks would be performed by the lender and also verification of the income and employment details furnished in the application.
In several contracts, there may be a provision of due on sale. This implies that if the property gets transferred to a new owner then the full loan balance would be accelerated and they may be required to pay the entire loan balance. In such cases, mortgage assumption cannot be done. A loan modification consultant may assist you during the process. You can also consider borrower liability following assumption where the lender may release the owner from the obligation. This is however, entirely dependent on the circumstances.