Help with Loan Assumption - What does it do?

[Anonymous]

Need to sell current home as newly built home is almost ready.   Current lender has offered a loan assumption option for prospective buyer.....Will a loan assumption release us of all liabilty or can we still be held liable if this person doesn't pay.

thanks!

[DallasLoanGuy]

buyer must qualify, but by assuming the loan, they get your rate/terms.

yes, you are released.  

[Anonymous]

I was doing some research on this. I just closed last week and found out my loan/rate is "assumable." It looks like you're released from the responsibility so long as it is specified in the contract, it may not be an automatic thing.

My 4.875% interest rate is going to look pretty sweet to somebody years down the line!

[ShanetheMortgageMan]

Yes, your loan must say it's assumable from the get go.  I haven't heard of a lender changing a loan from non-assumable to assumable after the loan has been made.  FHA, and other government loans, are often assumable.

[Anonymous]

Thanks for the responses!