An assumable mortgage is one which lets a buyer take over the existing loan of a seller. Assumable mortgages require the lender's approval. The person who assumes a mortgage takes the same interest rate and monthly payment schedule as the original loan, which can result in big savings if the interest rate on the existing mortgage is lower than the current rate on new loans. However, the lender can change the loans terms. The person assuming a mortgage still needs to qualify for the loan and pay closing fees, including the costs of the appraisal and title insurance.
The lender also holds the seller liable for the loan. For example, if the person assuming the mortgage defaults on payments and the lender forecloses, but the property sells for less than the loan's balance, the lender can sue the seller for the difference.
The Arizona General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legally binding document that outlines the terms and conditions involved in the sale of a residential property in Arizona, where the buyer assumes responsibility for an existing mortgage or deed of trust. This agreement is designed for transactions involving residential properties where the mortgage or deed of trust is already in place. It allows a buyer to assume the existing loan instead of obtaining a new mortgage, which can be beneficial if the terms of the existing loan are favorable or if the buyer is unable to qualify for a new loan. Key elements included in the Arizona General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust generally include: 1. Parties Involved: The agreement identifies the buyer, seller, and any other relevant parties, such as a real estate agent or attorney, who may be involved in the transaction. 2. Property Description: The agreement provides a detailed description of the residential property being sold, including the address, legal description, and any additional features or improvements. 3. Purchase Price and Payment Terms: This section outlines the agreed-upon purchase price for the property, including any earnest money deposit, down payment, and financing terms. It may also include contingencies and timelines for obtaining financing or appraisal. 4. Assumption of Mortgage or Deed of Trust: The agreement specifies that the buyer will assume responsibility for the existing mortgage or deed of trust on the property. It includes details about the terms of the assumption, such as the remaining balance, interest rate, and monthly payment amount. 5. Conditions and Contingencies: The agreement may include conditions that must be met before the sale is finalized, such as satisfactory home inspections, title searches, or loan approvals. These contingencies protect the buyer and seller from unforeseen issues and allow either party to back out of the agreement if the conditions are not met. 6. Home Warranty and Disclosures: The agreement may address whether the seller is providing a home warranty or any disclosures regarding the condition of the property, such as past repairs or known defects. 7. Closing and Possession: This section outlines the date and location of the closing, as well as any specific instructions regarding possession of the property, such as a leaseback agreement or early occupancy. Different types of Arizona General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust may include specific variations or addendums depending on unique circumstances. For example, there may be specific forms for different loan types (e.g., FHA, VA) or additional disclosures required for certain property types (e.g., condominiums, manufactured homes). It's important to consult with a qualified real estate attorney or agent to ensure the correct form is used for a specific transaction and to ensure compliance with Arizona state laws and regulations.The Arizona General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legally binding document that outlines the terms and conditions involved in the sale of a residential property in Arizona, where the buyer assumes responsibility for an existing mortgage or deed of trust. This agreement is designed for transactions involving residential properties where the mortgage or deed of trust is already in place. It allows a buyer to assume the existing loan instead of obtaining a new mortgage, which can be beneficial if the terms of the existing loan are favorable or if the buyer is unable to qualify for a new loan. Key elements included in the Arizona General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust generally include: 1. Parties Involved: The agreement identifies the buyer, seller, and any other relevant parties, such as a real estate agent or attorney, who may be involved in the transaction. 2. Property Description: The agreement provides a detailed description of the residential property being sold, including the address, legal description, and any additional features or improvements. 3. Purchase Price and Payment Terms: This section outlines the agreed-upon purchase price for the property, including any earnest money deposit, down payment, and financing terms. It may also include contingencies and timelines for obtaining financing or appraisal. 4. Assumption of Mortgage or Deed of Trust: The agreement specifies that the buyer will assume responsibility for the existing mortgage or deed of trust on the property. It includes details about the terms of the assumption, such as the remaining balance, interest rate, and monthly payment amount. 5. Conditions and Contingencies: The agreement may include conditions that must be met before the sale is finalized, such as satisfactory home inspections, title searches, or loan approvals. These contingencies protect the buyer and seller from unforeseen issues and allow either party to back out of the agreement if the conditions are not met. 6. Home Warranty and Disclosures: The agreement may address whether the seller is providing a home warranty or any disclosures regarding the condition of the property, such as past repairs or known defects. 7. Closing and Possession: This section outlines the date and location of the closing, as well as any specific instructions regarding possession of the property, such as a leaseback agreement or early occupancy. Different types of Arizona General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust may include specific variations or addendums depending on unique circumstances. For example, there may be specific forms for different loan types (e.g., FHA, VA) or additional disclosures required for certain property types (e.g., condominiums, manufactured homes). It's important to consult with a qualified real estate attorney or agent to ensure the correct form is used for a specific transaction and to ensure compliance with Arizona state laws and regulations.
