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 Michigan 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 of the sale of a residential property in Michigan, where the buyer assumes the existing mortgage or deed of trust on the property. This agreement serves as a contract between the buyer and the seller, ensuring that both parties understand their rights and obligations throughout the transaction. The Michigan General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust typically includes the following key elements: 1. Parties involved: Identification of the buyer and the seller, including their legal names and contact information. 2. Property details: A detailed description of the residential property being sold, including the address, legal description, and any pertinent details about the property's condition or features. 3. Purchase price: The agreed-upon purchase price for the property and details on how the payment will be made, including any deposit or down payment. 4. Assumption of mortgage or deed of trust: A clear statement that the buyer will assume the existing mortgage or deed of trust on the property, outlining the terms, conditions, and specific provisions related to the assumption. 5. Contingencies: Any contingencies or conditions that must be met before the sale is finalized, such as the buyer obtaining financing or the property passing a satisfactory inspection. 6. Closing and possession dates: The agreed-upon dates for the closing of the sale and the transfer of possession from the seller to the buyer. 7. Seller disclosures: Any disclosures required by law, such as a seller's disclosure of known defects in the property, environmental hazards, or any other material information that may affect the buyer's decision to purchase the property. Different types of Michigan General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust may include variations in language, additional clauses, or specific provisions depending on the unique circumstances of the transaction. Some common variations may include agreements for rent-to-own or lease-option purchases, land contracts, or agreements with additional contingencies based on the buyer's or seller's specific requirements. It is important for both the buyer and the seller to carefully review the agreement, seek legal advice if necessary, and ensure that all relevant terms and conditions are included in the document to protect their interests.The Michigan 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 of the sale of a residential property in Michigan, where the buyer assumes the existing mortgage or deed of trust on the property. This agreement serves as a contract between the buyer and the seller, ensuring that both parties understand their rights and obligations throughout the transaction. The Michigan General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust typically includes the following key elements: 1. Parties involved: Identification of the buyer and the seller, including their legal names and contact information. 2. Property details: A detailed description of the residential property being sold, including the address, legal description, and any pertinent details about the property's condition or features. 3. Purchase price: The agreed-upon purchase price for the property and details on how the payment will be made, including any deposit or down payment. 4. Assumption of mortgage or deed of trust: A clear statement that the buyer will assume the existing mortgage or deed of trust on the property, outlining the terms, conditions, and specific provisions related to the assumption. 5. Contingencies: Any contingencies or conditions that must be met before the sale is finalized, such as the buyer obtaining financing or the property passing a satisfactory inspection. 6. Closing and possession dates: The agreed-upon dates for the closing of the sale and the transfer of possession from the seller to the buyer. 7. Seller disclosures: Any disclosures required by law, such as a seller's disclosure of known defects in the property, environmental hazards, or any other material information that may affect the buyer's decision to purchase the property. Different types of Michigan General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust may include variations in language, additional clauses, or specific provisions depending on the unique circumstances of the transaction. Some common variations may include agreements for rent-to-own or lease-option purchases, land contracts, or agreements with additional contingencies based on the buyer's or seller's specific requirements. It is important for both the buyer and the seller to carefully review the agreement, seek legal advice if necessary, and ensure that all relevant terms and conditions are included in the document to protect their interests.
