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.
Guam General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document used to facilitate the transfer of ownership rights from a seller to a buyer for a residential property located in Guam. This agreement allows the buyer to assume and take over the existing mortgage or deed of trust that is attached to the property. Below, we will discuss the details of this agreement and mention its different types: 1. Purpose: The Guam General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust serves as a contract between the seller and buyer to establish the terms and conditions of the property sale while assuming responsibility for the existing mortgage or deed of trust. 2. Parties involved: This agreement identifies the seller (current property owner) and buyer (prospective property owner) and includes their legal names, contact information, and any other relevant details. 3. Property description: The agreement provides a detailed description of the residential property being sold, including its address, legal description, and other relevant identifying details. 4. Assumption of mortgage or deed of trust: This agreement outlines that the buyer will assume the existing mortgage or deed of trust associated with the property. It specifies the original loan terms, including the outstanding balance, interest rate, repayment schedule, and any relevant escrow accounts. 5. Purchase price and payment terms: The agreement states the purchase price negotiated between the seller and buyer. It outlines the payment terms, including the down payment amount, financing arrangements, and any other relevant details such as contingencies or seller financing. 6. Property condition: This agreement typically includes provisions that the buyer accepts the property in its current condition, acknowledging any known defects or issues. It may outline the process for property inspections and the buyer's right to negotiate repairs or credits. 7. Title search and transfer: The agreement may require the seller to provide a clear and marketable title to the buyer. It may include provisions for obtaining title insurance, conducting a title search, and specifying who will be responsible for associated costs. Types of Guam General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust: 1. Simple Assumption Agreement: This type of agreement outlines the basic terms and conditions of the sale, including the assumption of the existing mortgage or deed of trust. 2. Assumption Agreement with Release of Liability: This type of agreement includes provisions for the release of the seller from any future liability or responsibility associated with the assumed mortgage or deed of trust. 3. Assumption Agreement with Seller Financing: In this agreement, the seller agrees to finance a portion of the purchase price. It includes provisions for the terms and conditions of the seller's financing, along with the assumption of the existing mortgage or deed of trust. Please note that this is just a general overview, and specific details and variations can be incorporated into the Guam General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust based on the requirements and preferences of the parties involved. It is advisable to consult with a legal professional to ensure compliance with local laws and to tailor the agreement to meet individual circumstances.
