To take over someone’s mortgage or house payments, contact the lender to assume the home seller’s original loan, and request for a copy of his mortgage documents to evaluate if the loan can be assumed, instructs SFGate. Calculate the upfront pay, and complete all necessary requirements asked by the lender.
The type of loan secured by mortgage but does not have a due-on-sale provision is called an assumable loan, explains SFGate. Traditional loans are typically not assumable. Loans supported by the Department of Veterans Affairs or Federal Housing Administration are usually assumable.
Call the lender to ask for assumption details and requirements, suggests SFGate. In some cases, a down payment is necessary. FHA loans usually require a down payment of at least 3.5 percent of the remaining balance of the existing assumable loan. The current property owner may ask for an upfront payment equal to the difference between the home’s present value and the amount owed. Find out if the lender allows a second mortgage if you don’t have sufficient money for the upfront payment.
Assuming a loan and applying for a new loan often have the same requirements, such as a credit score and a debt-to-income ratio that meet the lender’s criteria, states SFGate. After paying the necessary down payment and closing costs, sign the written assumption agreement at the closing to take over the loan.