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 Rhode Island 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 in Rhode Island. It serves as a contract between the buyer and seller, detailing the terms and conditions of the sale, as well as the assumption of an existing mortgage or deed of trust. This agreement is specifically designed for residential property sales where the buyer agrees to assume the seller's existing mortgage or deed of trust. This means that the buyer takes on the responsibility for paying off the remaining balance on the mortgage or deed of trust, typically in monthly installments, in addition to paying the purchase price for the property. This type of arrangement can be beneficial for both parties involved in the transaction. The Rhode Island 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: The agreement identifies the buyer and seller by their legal names and addresses. It also includes the property address being sold. 2. Purchase Price: The agreement specifies the mutually agreed-upon purchase price for the property. This is the amount the buyer will pay to the seller, in addition to assuming the existing mortgage or deed of trust. 3. Assumption of Existing Mortgage or Deed of Trust: This agreement explicitly outlines the terms and conditions under which the buyer agrees to assume the seller's existing mortgage or deed of trust. It includes details such as the outstanding loan balance, interest rate, and remaining loan term. 4. Closing Date: The document includes the agreed-upon closing date, which is the date when the property officially changes ownership. It also outlines the necessary steps to be taken by both parties before the closing, such as property inspections and title searches. 5. Contingencies: The agreement may include contingencies that protect the interests of both the buyer and the seller. These contingencies might include financing contingencies, inspection contingencies, or contingencies related to the sale of the buyer's current property. 6. Earnest Money: The agreement may require the buyer to provide earnest money, which is a deposit that demonstrates their commitment to purchasing the property. The amount and conditions for the earnest money are outlined in the agreement. It's important to note that there may be various types of Rhode Island General Forms of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust, each tailored to specific circumstances or additional provisions requested by the parties involved. These variations may include agreements with specific terms related to repairs, seller disclosures, financing conditions, or unique contingencies. The specific name or type of agreement may depend on the additional provisions and requirements agreed upon by the buyer and seller. In conclusion, the Rhode Island General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a comprehensive legal document that protects the rights and defines the obligations of both the buyer and seller in a real estate transaction involving the assumption of an existing mortgage or deed of trust.The Rhode Island 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 in Rhode Island. It serves as a contract between the buyer and seller, detailing the terms and conditions of the sale, as well as the assumption of an existing mortgage or deed of trust. This agreement is specifically designed for residential property sales where the buyer agrees to assume the seller's existing mortgage or deed of trust. This means that the buyer takes on the responsibility for paying off the remaining balance on the mortgage or deed of trust, typically in monthly installments, in addition to paying the purchase price for the property. This type of arrangement can be beneficial for both parties involved in the transaction. The Rhode Island 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: The agreement identifies the buyer and seller by their legal names and addresses. It also includes the property address being sold. 2. Purchase Price: The agreement specifies the mutually agreed-upon purchase price for the property. This is the amount the buyer will pay to the seller, in addition to assuming the existing mortgage or deed of trust. 3. Assumption of Existing Mortgage or Deed of Trust: This agreement explicitly outlines the terms and conditions under which the buyer agrees to assume the seller's existing mortgage or deed of trust. It includes details such as the outstanding loan balance, interest rate, and remaining loan term. 4. Closing Date: The document includes the agreed-upon closing date, which is the date when the property officially changes ownership. It also outlines the necessary steps to be taken by both parties before the closing, such as property inspections and title searches. 5. Contingencies: The agreement may include contingencies that protect the interests of both the buyer and the seller. These contingencies might include financing contingencies, inspection contingencies, or contingencies related to the sale of the buyer's current property. 6. Earnest Money: The agreement may require the buyer to provide earnest money, which is a deposit that demonstrates their commitment to purchasing the property. The amount and conditions for the earnest money are outlined in the agreement. It's important to note that there may be various types of Rhode Island General Forms of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust, each tailored to specific circumstances or additional provisions requested by the parties involved. These variations may include agreements with specific terms related to repairs, seller disclosures, financing conditions, or unique contingencies. The specific name or type of agreement may depend on the additional provisions and requirements agreed upon by the buyer and seller. In conclusion, the Rhode Island General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a comprehensive legal document that protects the rights and defines the obligations of both the buyer and seller in a real estate transaction involving the assumption of an existing mortgage or deed of trust.
