If you need to get out of a current home loan quickly, you may not have time to put your home on the market and wait for it to sell. However, if you transfer your debt to another individual, that person can take over your mortgage payments, giving you the freedom to move or buy another home elsewhere. The person to whom you transfer the mortgage loan has the benefit of being able to obtain your interest rate. If your house has a guarantee, you can even receive a benefit from the transfer.
Check your original loan papers to see if there is a sell-off clause. If your mortgage loan agreement contains such a clause and you attempt to transfer ownership of the property without notifying the lender, the lender may demand immediate repayment of the loan.
Contact the lender and explain that you want to transfer your mortgage to someone else. Each mortgage lender handles transfers differently, but yours will likely mail you an information packet along with papers that you will need to sign.
Ask the new owner to call your lender and request an assumption package. It contains information and instructions for the person who wants to take responsibility for your mortgage loan.
Fill out and send back your mortgage company’s papers. The new owner must do the same.
Negotiate with the buyer to pay a portion of the warranty on your home. If you have no warranty, that is not a problem. However, if your home is worth more than what you owe your lender, it is common and reasonable to ask the seller to pay you a portion of your collateral in exchange for the transfer.
Wait for the company to process the transfer request and perform a credit review on the new owner. The person who receives your mortgage loan must meet the credit and income requirements of your lender.
Visit an attorney and draw up a disclaimer. This document releases you from the responsibility of paying the mortgage after the transfer. Therefore, in the event of a mortgage default by the buyer, the lender cannot request such payment from you.
Pay the lender’s transfer fee. The transfer fee may vary, depending on the lender. FHA loans, for example, have a transfer fee of $ 500. You or the person taking over the mortgage must pay the fee, or you can divide the cost between the two of you.
Sign the deeds of your house so that they belong to its new owner.