If you need to get out of a current mortgage loan quickly, you may not have time to put your home on the market and wait for it to be sold. However, if you transfer your debt to another individual, that person can take care of your mortgage payments, giving you the freedom to move or buy another home somewhere else. The person to whom you transfer the mortgage loan has the benefit of being able to obtain your interest rate. If your home is guaranteed, you can even receive a benefit from the transfer.
Instructions
- Check your original loan papers to see if there is a sell-due clause. If your mortgage agreement contains a clause of this nature and you attempt to transfer ownership of the property without notifying the lender, the lender may demand immediate repayment of the loan.
- Get in touch with the lender and explain that you want to transfer your mortgage to another person. Each mortgage lender handles transfers differently, but it is likely that yours will mail you a packet of information along with papers that you must sign.
- Ask the new owner to call your lender and ask for an assumption package. It contains information and instructions for the person who wants to take responsibility for your mortgage loan.
- Fill out and return the papers from your mortgage company. The new owner must do the same.
- Negotiate with the buyer to pay a portion of the guarantee of your house. If you do not have a guarantee, that is not a problem. However, if your home is worth more than you owe to your lender, something common and reasonable is that you ask the seller to pay you a portion of your guarantee in exchange for the transfer.
- Wait for the company to process the transfer request and conduct a credit review on the new incumbent. The person who receives your mortgage loan must meet the credit and income requirements of your lender.
- Visit a lawyer and draw up a disclaimer. This document frees you from the responsibility of paying the mortgage after the transfer. Therefore, in case of default of payment of the mortgage by the buyer, the lender cannot request such payment.
- Pay the lender’s transfer fee. The transfer fee may vary, depending on the lender. FHA loans, for example, have a transfer fee of $ 500. You or the person who takes the mortgage must pay the fee, or they can split the cost between the two.
- Sign the deeds of your house so that they belong to their new owner.
Tips & Warnings
- Government-backed mortgages, such as FHA and VA mortgages, can often be transferred.
- Even if your mortgage loan is transferable, your lender may refuse to allow you to transfer the debt if you are behind on your mortgage payments.