- 1). Decide on a listing price for the property. Selling an assumable mortgage does not require the property owner to list the property for the amount of the mortgage. For example, a seller with an existing mortgage of $80,000 can list the property for $120,000 and make a profit of $40,000 if the buyer agrees to the price. The buyer then takes over the mortgage of $80,000 but must also take out an extra loan of $40,000.
- 2). Contact your mortgage company to make sure the mortgage is assumable. Assuming a mortgage comes with some risks to the buyer and to the lender, so it is up to the mortgage company to make the final decision about whether or not the assumption of the mortgage is allowed. Once you have a potential buyer for the property, be sure to place the buyer in contact with the mortgage company to provide the lender with all necessary information. In some cases, the final decision might come down to whether or not the buyer fulfills the lender's obligations for financial security and reliability.
- 3). Provide the exact amount left on the loan at closing with the buyer. Mortgage amounts vary from month to month, and a property that takes three months to close has less of a mortgage to assume than one that closes in a matter of a few weeks. If the sale price of the property remains fixed, the buyer has to finance more, because the amount to be assumed has decreased. Keep the mortgage company and the buyer updated regarding the loan status to ensure that all parties know exactly what must be paid and when.
previous post