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 Maryland General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document used in Maryland for the sale and purchase of residential property where the buyer assumes the existing mortgage or deed of trust. This agreement outlines the terms and conditions between the buyer and seller, ensuring a smooth transfer of ownership. Keywords: Maryland, General Form, Agreement of Sale, Residential Property, Assumption, Existing Mortgage, Deed of Trust. This form allows the buyer to assume the existing mortgage or deed of trust, meaning they take over the responsibility for the outstanding loan and continue making payments on it. It provides a convenient option for buyers who may not qualify for a new mortgage or want to secure a lower interest rate by taking over an existing loan. The Maryland General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust typically includes the following information: 1. Property details: The agreement includes a detailed description of the residential property being sold, including the address, legal description, and any additional features or amenities. 2. Purchase price: The agreement specifies the agreed-upon purchase price for the property. This may include any adjustments or credits agreed upon by the buyer and seller. 3. Mortgage or deed of trust assumption details: The document outlines the terms and conditions for the buyer's assumption of the existing mortgage or deed of trust. It includes information such as the outstanding balance, interest rate, payment schedule, and any other relevant terms of the loan. 4. Contingencies: The agreement may include contingencies that protect the buyer, such as a home inspection contingency or financing contingency. These stipulations ensure that the buyer has an opportunity to inspect the property and secure adequate financing before finalizing the sale. 5. Closing date and location: The agreement specifies the agreed-upon closing date and the location where the closing will take place. This is typically a title company or attorney's office. 6. Seller's representations and warranties: The seller provides assurances regarding the property's condition, title, and any other relevant representations. This ensures that the buyer is aware of any potential issues before completing the purchase. Different versions or variations of the Maryland General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust may exist based on specific requirements or modifications agreed upon between the parties involved. These variations might include additional provisions or clauses tailored to address unique circumstances or concerns during the sale of the residential property. In summary, the Maryland General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a crucial document that facilitates the purchase of a residential property while allowing the buyer to take over the existing mortgage or deed of trust. Its comprehensive nature ensures that both parties are protected and aware of their rights and obligations.
