Mortgage Assumption Agreement
A Mortgage Assumption Agreement is commonly used for allowing a third party to assume the obligations of a mortgage loan. The loan assumption agreement frees the original borrower from the note and mortgage.
The lender must approve any assumption agreement and will usually take steps to underwrite the assuming parties credit.
Most lenders do not allow loan assumptions, but VA loans are an exception. VA loans are assumable upon VA approval of the party assuming the loan.
Mortgage Assumption Agreement (Sample)
RECORD AND RETURN TO: (Lenders Name and address)
NOTE AND MORTGAGE ASSUMPTION AGREEMENT (SAMPLE)
____________("Original Borrower") executed a Note secured by a Mortgage and other security agreements of even date therewith ("Original Note and Mortgage"), all in favor of ("Lender"). The Mortgage was recorded in Official Records Book_________ , at Page ________ , of the
Public Records of ________County, State; encumbering the following described property:
2. The original borrower has conveyed the above-described property and the property is now owned by:
who now requests that the Lender permit the Assuming Borrower to assume the Original Mortgage loan.
_________ ( Borrower")
3. The principal balance outstanding under the terms of the Original Note and Mortgage as of ____20 , is the sum of_____Dollars ($_).
4. The Assuming Borrower hereby agrees to pay the Original Note and Mortgage according to the original terms of the loan, as hereby modified, and assumes all of the liabilities, covenants and undertakings under the Original Note and Mortgage.
5. The terms of the Original Note and Mortgage are modified as set forth in the subparagraphs checked below:
( ) A. In no respects.
( ) B. The interest rate shall be __ percent (___) per annum on the outstanding principal balance with monthly payments of ________ due on the first day of ______ , 20__ and on the first day of each month following until the next Change Date. Calculation of future rate adjustments will be made in accordance with the Note by adding_____ percentage points to the Current Index and will then round the result of this addition to the nearest one-eighth of one percentage point.
( ) C. RECORD KEEPING/FINANCIAL INFORMATION - That the Mortgagor shall keep adequate records and books of account in accordance with generally accepted accounting principles and will permit the Mortgagee, its agents, accountants and attorneys to visit and inspect the Mortgaged Property and examine Mortgagor's records and books of account and to discuss its affairs, finances and accounts with the Mortgagor, at such reasonable times as may be requested by the Mortgagee. Mortgagor shall each year deliver to the Mortgagee, within forty five (45) days after the end of each fiscal year of the business conducted on the Mortgaged Property, a balance sheet, a statement of profit and loss, and a statement of income and expenses of the Mortgaged Property, and a complete financial statement of the Mortgagor's assets and liabilities, setting forth in each case, in comparative form, figures for the preceding year. Throughout the term of this Mortgage, Mortgagor, at the request of Mortgagee, with reasonable promptness, will deliver to Mortgagee such other information with respect to Mortgagor as Mortgagee may reasonably request from time to time, including, without limitation, such financial statements and other information as Mortgagee may require. All financial statements required hereunder shall be prepared in accordance with generally accepted accounting practices, shall be delivered in duplicate, and shall be accompanied by the certificate of the Mortgagor, dated within five (5) days of the delivery of such statements to Mortgagee, stating that the financial statements are true and accurate in all respects and that it knows of no default hereunder nor of any event which after notice or lapse of time or both would constitute a default, which has occurred and is continuing, or, if any such default or event has occurred and is continuing, specifying the nature and period of existence thereof, and what action Mortgagor has taken or proposes to take with respect thereto, and, except as otherwise specified, stating that Mortgagor has fulfilled all of its obligations under this Mortgage which are required to be fulfilled on or prior to the date of such certificate. At Mortgagee's option, the financial statements shall be audited and accompanied by a report and opinion of a certified public accountant of recognized standing. In addition to the foregoing, Mortgagor shall cause to be delivered to Mortgagee, on an annual basis or as otherwise more frequently required by any guaranty executed in connection with this Mortgage, accountant prepared financial statements for each guarantor of the Promissory Note and, upon request of the Mortgagee, Mortgagor shall furnish to Mortgagee quarterly unaudited rent rolls on the Mortgaged property.
( ) D. FURTHER ASSURANCES BY MORTGAGOR - That the Mortgagor shall execute and deliver (and pay the costs of preparation and recording thereof) to Mortgagee and to any subsequent holder of this Mortgage from time to time, upon demand, any further instrument or instruments, financing statements, assignments, renewal and substitution notes, and such other documents as may be requested by Mortgagee or subsequent holder to reaffirm, correct or perfect evidence of the Indebtedness or any security therefore, including, without limitation, the title of Mortgagee or subsequent holder to all or any part of the Mortgaged Property, whether now mortgaged or later substituted for, or acquired subsequent to the date of this Mortgage.
6. In all other respects, the terms of the Original Note and Mortgage are hereby ratified, affirmed and made a part hereof.
7. A transfer fee in the amount of $____ is herewith tendered to the Lender.
8. Herewith tendered to the Lender is:
( ) A. Intangible Tax $ ______
( ) B. Documentary Stamps Tax $ _____
9. Transfer of title from the Original Borrower to the Assuming Borrower has been by statutory Warranty Deed, which provides that said Deed is conveyed subject to the Mortgage heretofore given to the Original Borrower. A recorded copy of said Warranty Deed shall be delivered to the Lender.
10. If the Original Mortgage identified in Paragraph 1 hereof provides for the release of the Original Borrower upon the Lender's consent to the Mortgage Assumption, then and in that event only, the Lender hereby waives the option to accelerate as a result of the conveyance of the encumbered property to the Assuming Borrower, and hereby releases the Original Borrower of all liabilities, covenants and undertakings contained in the Original Note and Mortgage.
The following instrument was acknowledged before me this day of ________, 20__ by
Who is personally known to me or who has produced as identification and who did take oath.
My Commission Expires:
STATE OF )
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of 20__ by ____
___of , on behalf of said corporation.
My commission Expires:
Notary Public, State of
RETURN TO: Bank
with questions or comments about this web site.moneyomg.com-2020 All rights reserved Site Index