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 Nevada General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document that outlines the terms and conditions for the sale of a residential property in Nevada, where the buyer assumes the existing mortgage or deed of trust associated with the property. This agreement is typically used when the buyer intends to take over the seller's mortgage payments instead of obtaining a new loan. The Nevada General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust includes various essential sections that detail the agreement between the buyer and the seller. These sections typically cover: 1. Property Information: This section provides a detailed description of the residential property being sold, including the address, legal description, and any associated fixtures or improvements. 2. Purchase Price: Here, the agreed upon purchase price for the property is specified. This can include any earnest money or down payment already made by the buyer. 3. Existing Mortgage or Deed of Trust: This section outlines the details of the current mortgage or deed of trust, including the outstanding loan balance, interest rate, and payment terms. It also includes provisions for how and when the buyer will assume responsibility for the mortgage payments. 4. Contingencies and Inspections: The agreement may include provisions for contingencies and inspections, such as allowing the buyer to conduct a home inspection or review the property's title and applicable documents before finalizing the sale. 5. Buyer's and Seller's Obligations: This portion of the agreement lays out the responsibilities of both the buyer and the seller, including any repairs or maintenance obligations, payment of property taxes and insurance, and compliance with state and local laws. 6. Closing and Escrow Details: The agreement specifies the closing and escrow process, including the date by which the sale must be completed, the location of the closing, and the allocation of closing costs between the parties involved. 7. Default and Remedies: This section outlines the consequences of default by either party and the available remedies, such as termination of the agreement or pursuing legal action. There may be different variations of the Nevada General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust tailored to specific situations or additional provisions requested by the parties involved. Some possible variations include agreements with seller financing or agreements that address the assumption of multiple mortgages or deeds of trust. It is important for both parties to carefully read and understand the agreement before signing, and to consult with legal professionals if needed, to ensure their rights and responsibilities are adequately protected.
