Assumable - Posted by Liz

Posted by Ben in Ohio on May 03, 2000 at 13:13:58:

Jim–

I have a friend of mine who purchased a home on land contract three years ago. The loan of 128K is assumable. However, his credit is not good enough (sccording to the lender) for him to assume the note. The lender did say he could do it in December–this is due to a BK a few years ago. The seller of the home would like his name off the note in order to purchace other properties. How can this be structured, if at all.

Thanks

Assumable - Posted by Liz

Posted by Liz on April 20, 2000 at 19:12:49:

Hello everyone, hope everyone is blessed and happy. I have a question. Can anyone tell me the steps for assuming a property? After you assum are you the owner? What are the pros and cons? Sorry about that but I did say a question but turned out to be more than one.
Thanks so much for your help and answers to all my question.
Liz

Re: Assumable - Posted by Jim IL

Posted by Jim IL on April 20, 2000 at 21:49:38:

Liz,
First, lets clear something up here for you.
You do not “Assunme” a property.
You may assume ownership, or take title to the property.
But, in Real Estate, the most common use of the word “Assume” is when someone “assumes” a loan.
This just means that the loan is placed into your name, and you are now liable for it.
But, with all the lessons you can learn here, why would you “assume” a loan, or put it in your name at all?
Do some reading here and you will soon see there are better ways (IMHO) to take over a home.
Get the deed, (that places the title/ownership of the home into your name, or the name of some entity that you create.)

So, of you find a real motivated seller and they need out of the home and out from under the payments, then you can take the home, “subject to” the existing financing.
This is where you take title to the home, hopefully using a land trust, and then the loan payments are made by you, but the liability stays with the seller on that loan. (it remains in there name.)

Hope that helps,
Jim IL

P.S. for more info on “subject to” read the “How to articles” here, and look at the ones from Wm Bronchick about “Beating the Due On Sale Clause”.

Re: Assumable - Posted by Ben in Ohio

Posted by Ben in Ohio on May 03, 2000 at 13:15:23:

Jim–

I have a friend of mine who purchased a home on land contract three years ago. The loan of 128K is assumable. However, his credit is not good enough (according to the lender) for him to assume the note. The lender did say he could do it in December–this is due to a BK a few years ago. The seller of the home would like his name off the note in order to purchace other properties. How can this be structured, if at all.

Thanks