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 Pennsylvania General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document used in real estate transactions involving the sale of residential properties that have an existing mortgage or deed of trust. This agreement allows for the assumption of the existing mortgage or deed of trust by the buyer, instead of obtaining a new loan. Key Elements of the Pennsylvania General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust include: 1. Parties: The agreement clearly outlines the names and roles of the parties involved, including the buyer, seller, and any additional stakeholders such as a mortgage lender or trustee. 2. Property Details: It is essential to provide accurate and detailed information about the residential property being sold. This includes the property address, legal description, and any specific details or features that should be mentioned. 3. Purchase Price and Terms: The agreement must specify the agreed-upon purchase price for the property, along with the terms of the payment (e.g., lump sum, installment payments). 4. Assumption of Mortgage/Deed of Trust: This section outlines how the buyer will assume the existing mortgage or deed of trust. It includes details about the current loan balance, interest rate, monthly payments, and any other relevant terms and conditions related to the assumption. 5. Condition of Property: The agreement may include provisions related to the condition of the property, including inspections, repairs, or any specific arrangements agreed upon by both parties. 6. Closing and Settlement: This section outlines the timeline and process for the closing of the sale, including the responsibilities of each party. It may also include provisions related to prorated taxes, title insurance, and other closing costs. It's important to note that there may be variations or different types of Pennsylvania General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust that are tailored to specific situations or preferences. For example, there could be variations depending on the type of property (e.g., single-family home, condominium) or if additional contingencies or clauses are added to the agreement by the parties involved. However, the core elements mentioned above are typically found in most versions of this agreement in Pennsylvania.
