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How to Assume a Mortgage

written by: Lucinda Watrous•edited by: Donna Cosmato•updated: 6/6/2010

If you don't want to get your own mortgage or it doesn't seem likely for you, you may be able to find one that you can assume. Read on to find out more about how to assume a mortgage.

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    How to Assume a Mortgage

    When trying to assume a mortgage there are a few steps that you need to take. If this is your very first time and you do not know much about assuming a mortgage, then take these tips along with you when house hunting.

    It is important to make sure the mortgage you want is assumable before doing anything else. You can find homes with assumable mortgages on the Internet, which is going to be one of the best tools you could ever use when home buying. Keep in mind that the only mortgages that can be assumed are VA and FHA mortgages.

    After you have that out of the way, you need to make sure that you take the time to get copies of the loan papers directly from the seller. This is going to allow you to get a detailed look at the exact terms of the loan. When assuming a mortgage, you need to make sure that you understand everything that is found within these loan papers. From there, you need to contact the holder of the loan (most likely the lender) and talk to them about getting an assumption package. This is an important tool that you will need when assuming a mortgage because it tells you everything you need to do and everything that you can expect during the process.

    After you understand what you need to do in order to assume a mortgage, you then need to talk to the lender about the specific requirements needed in order to get the ball rolling. Typically, a lender is going to ask you to put down a down payment of some sort so to secure the loan and move into the home. You will also need to provide the lender with information about your job and income, as well as your tax returns. If you are struggling with all of the money that you need for the home, you may be able to ask your lender about financing.

    Once you provide the lender with all of the necessary paperwork and information, the process begins. Before you actually assume a mortgage, you need to do a lot of homework. Compare the loan that you are looking into with the interest rates as well as other loans that may be available to you. Keep in mind that you may also have to pay a fee for the loan assumption package, but this will cost you no more than about $50.

    Before signing anything, it is vital that you read over every piece of paperwork and you completely understand everything. It would be a good idea to have a lawyer examine the paperwork as well to save yourself a lot of potential headaches later.