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 Wisconsin General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is a legal document used in Wisconsin to facilitate the sale of residential property, where the buyer assumes the existing mortgage or deed of trust of the property. This agreement outlines the terms and conditions of the sale and serves as a binding contract between the buyer and the seller. Keywords: Wisconsin, General Form, Agreement of Sale, Residential Property, Assumption, Existing Mortgage, Deed of Trust The Wisconsin General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust can be customized and modified as per the specific requirements of the parties involved or as mandated by state laws. Although the general form covers the basic provisions necessary for the sale of residential property with assumption of an existing mortgage or deed of trust, there may be different types of this form available depending on the additional clauses and contingencies applicable to each transaction. Common types of Wisconsin General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust include: 1. Conventional Assumption: This type of agreement is used when the buyer agrees to assume a conventional mortgage or deed of trust on the property. The terms and conditions of the existing mortgage, such as interest rates, repayment terms, and any prepayment penalties, may be stated in this agreement. 2. FHA Assumption: In cases where the residential property has an FHA (Federal Housing Administration) insured mortgage, this type of agreement is utilized. This agreement will incorporate the necessary provisions specific to FHA loans, such as compliance with FHA guidelines, qualifying for assumption, and potential fees involved. 3. VA Assumption: When the residential property is financed with a VA (Department of Veterans Affairs) loan, this type of agreement is used. The agreement will contain clauses specific to VA loans, such as the buyer's eligibility, VA loan requirements, and potential fees involved. 4. USDA Assumption: In instances where the residential property is financed through a USDA (United States Department of Agriculture) loan, this agreement type is employed. This agreement will include provisions relevant to USDA financing, including eligibility criteria, guidelines, and any applicable costs. It is crucial to consult with a real estate attorney or an experienced real estate professional to ensure the appropriate type of Wisconsin General Form of Agreement of Sale of Residential Property with Assumption of Existing Mortgage or Deed of Trust is selected, based on the nature of the mortgage or deed of trust associated with the property.
