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.
South Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document used to outline the terms and conditions of a real estate transaction in South Dakota where the buyer assumes the existing mortgage or deed of trust on the property being sold. This agreement acts as a binding contract between the buyer and seller, providing a framework for the sale process. Key elements typically included in this agreement are: 1. Parties Involved: The agreement identifies the buyer and seller by their full legal names and addresses. 2. Property Description: The agreement outlines the property's address and legal description to ensure accurate identification. 3. Purchase Price and Payment Terms: This section indicates the agreed-upon purchase price of the property and the payment terms, such as the initial down payment and subsequent installments if any. 4. Assumption of Mortgage or Deed of Trust: The agreement specifies that the buyer will take over the existing mortgage or deed of trust on the property. It includes details such as the loan balance, interest rate, and any applicable fees. 5. Closing and Possession: This section outlines the timeline for the closing of the transaction and the transfer of possession from the seller to the buyer. 6. Contingencies and Disclosures: Any contingencies or conditions, such as satisfactory property inspection or appraisal, should be explicitly mentioned in the agreement. The agreement may also require the seller to provide specific disclosures about the property's condition or any known issues. 7. Representations and Warranties: The agreement may include clauses where both parties make certain representations and warranties about the property and their legal rights to sell or purchase it. 8. Default and Remedies: The agreement may outline the consequences of default by either party, along with the remedies available to the non-defaulting party, such as termination or damages. It's important to note that there may be different versions or variations of the South Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust available, depending on the specific requirements of the parties involved or other legal considerations. Examples of potential variations may include addendums for specific contingencies, additional terms and conditions, or inclusion of special agreements like seller financing. Consulting a real estate attorney or utilizing a standardized form provided by a reputable legal resource is advisable to ensure compliance with South Dakota state laws and address any unique aspects of the transaction.South Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document used to outline the terms and conditions of a real estate transaction in South Dakota where the buyer assumes the existing mortgage or deed of trust on the property being sold. This agreement acts as a binding contract between the buyer and seller, providing a framework for the sale process. Key elements typically included in this agreement are: 1. Parties Involved: The agreement identifies the buyer and seller by their full legal names and addresses. 2. Property Description: The agreement outlines the property's address and legal description to ensure accurate identification. 3. Purchase Price and Payment Terms: This section indicates the agreed-upon purchase price of the property and the payment terms, such as the initial down payment and subsequent installments if any. 4. Assumption of Mortgage or Deed of Trust: The agreement specifies that the buyer will take over the existing mortgage or deed of trust on the property. It includes details such as the loan balance, interest rate, and any applicable fees. 5. Closing and Possession: This section outlines the timeline for the closing of the transaction and the transfer of possession from the seller to the buyer. 6. Contingencies and Disclosures: Any contingencies or conditions, such as satisfactory property inspection or appraisal, should be explicitly mentioned in the agreement. The agreement may also require the seller to provide specific disclosures about the property's condition or any known issues. 7. Representations and Warranties: The agreement may include clauses where both parties make certain representations and warranties about the property and their legal rights to sell or purchase it. 8. Default and Remedies: The agreement may outline the consequences of default by either party, along with the remedies available to the non-defaulting party, such as termination or damages. It's important to note that there may be different versions or variations of the South Dakota General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust available, depending on the specific requirements of the parties involved or other legal considerations. Examples of potential variations may include addendums for specific contingencies, additional terms and conditions, or inclusion of special agreements like seller financing. Consulting a real estate attorney or utilizing a standardized form provided by a reputable legal resource is advisable to ensure compliance with South Dakota state laws and address any unique aspects of the transaction.
