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.
Title: North Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust Keywords: North Dakota, General Form, Agreement of Sale, Residential Property, Assumption, Existing Mortgage, Deed of Trust Description: The North Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legally binding document used in real estate transactions within the state. This comprehensive agreement outlines the terms and conditions associated with the sale of a residential property where the buyer assumes the existing mortgage or deed of trust. 1. Types of North Dakota General Form Agreements: a. North Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage: This agreement is used when a buyer intends to take over the existing mortgage as part of the purchase arrangement. b. North Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Deed of Trust: This type of agreement is employed when the buyer is assuming an existing deed of trust instead of a mortgage. 2. Content of the Agreement: — Parties Involved: The agreement includes the names, addresses, and contact details of both the buyer (purchaser) and the seller (vendor). — Property Description: A detailed description of the residential property being sold, including its address, legal description, and any associated land or fixtures. — Assumption of Mortgage/Deed of Trust: This section outlines the buyer's responsibility for assuming the existing mortgage or deed of trust. It includes details such as the outstanding loan balance, interest rate, term, and any prepayment penalties. — Purchase Price: The agreed-upon purchase price for the property is specified, along with the form and timing of the payment, any earnest money deposits, and closing costs allocation. — Contingencies and Inspections: This section may address any contingencies that need to be fulfilled before the sale is completed, such as inspections, repairs, or obtaining financing. — Title and Closing: Details regarding the transfer of title and closing procedures are covered, including the timeframe for the completion of the transaction and the distribution of necessary documents. — Default and Remedies: This section specifies the consequences of default by either party and outlines the available remedies or resolution procedures in case of a dispute. — Additional Terms and Conditions: Any additional terms or conditions unique to the transaction can be included in this section, ensuring both parties are aware of any specific requirements or arrangements agreed upon. It is important to note that while this description provides a general overview, it is recommended to consult a legal professional to ensure compliance with applicable North Dakota laws and to address any specific circumstances or variations within the agreement.
