Are all loans assumable?
Answer: No, all loans are not assumable. Assumption eligibility is determined by verbiage in the note/mortgage. Generally ARM loans in the adjustable period, VA, and FHA loans are assumable.
What are the requirements to assume a loan?
Answer: A qualified assumption requires the assuming borrower to qualify for credit based on current underwriting guidelines. Credit score, debt-to-income ratios and other factors may be used to determine qualification, but vary based on loan type.
Will Bank of America remove my ex-spouse based on the requirements of my divorce decree?
Answer: A divorce decree typically does not obligate a lender to remove a borrower. The person that is awarded the property will typically have to qualify solely on his or her credit profile based on current underwriting guidelines regardless of the requirements of the divorce decree.
What if my divorce is not final?
Answer: A fully executed divorce decree/separation agreement along with a property settlement agreement that clearly details the requirements each party is obligated to follow (related to the property) is required in order to move forward with an assumption request.
How can a loan be assumed in the event of a death of the borrower?
Answer: The successor that is on title prior to the customer’s death or has inherited the property through probate will need to qualify for credit in order to assume the liability.
Do I have to go through the assumption process if I used my VA entitlement to secure the original financing
and would like to release the co-borrower?
Answer: No. If the remaining obligated veteran used their entitlement to secure the original financing, the VA Regional Loan Center would need to approve the release of the co-borrower. The assumptions unit at the bank will process the release based on all the terms being met in the documented VA release letter.
What happens if the assuming borrower does not qualify to assume the loan?
Answer: If the assuming borrower does not qualify to assume the existing loan, he/she may choose to apply for a new loan by simply contacting a mortgage loan officer at 1.866.536.0575.
Can I have someone co-sign with me for the assumption?
Answer: Yes, co-signers are permitted, but there are loan program restrictions specific to qualifying with a non-occupying borrower that will be discussed once your application is received.
Will the seller remain financially responsible for the loan once the Qualified Assumption is approved and completed?
Answer: No. Once a Qualified Assumption is approved and closed, the seller is released from all future liability associated with the loan.
Will the person being released from liability for the loan be required to sign any documents?
Answer: Yes. In order to complete the Qualified Assumption, the person being released from financial liability will be required to sign certain documents. Because of this, a seller who is unable or unwilling to cooperate can prevent this process from being an option.
If I have a VA loan, does an assumption restore my eligibility?
Answer: The Qualified Assumption process primarily releases one or more borrowers from liability for the debt. Only if the person(s) assuming the loan has their own eligibility to substitute for the borrower being released will the eligibility be restored. If the buyers do not have any eligibility to substitute, then the original eligibility remains with the loan until it is either paid off or refinanced.
