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If I get a loan assumption, how do i protect myself as a borrower? I don't want to trigger the due on sale clause

by dyhughes922484 from Athens, Georgia. Oct 15th 2018 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Much more info needed, but in general.. only FHA and VA loans are eligible for assumptions, but only "With Qualifying".. meaning, you contact the lender, fill out an application, send them your supporting documents, and then they make the decision.. if you are approved, then the loan will be transferred out of the old borrowers name and into your name.. same goes for the title to the property.. If you "Assume" the loan any other way, then if the lender finds out.. they can exercise their due on sale clause.. Lenders will routinely check the county records to see if the property has had a change in ownership, so eventually, they will find out. if you own a home that is financed, then you can add or remove people so long as one of the original borrowers remains on the title, it's not a problem.. but if the old owners deed you the property 100% and they are removed, it can trigger the due on sale... the only way to prevent this is to do a legitimate assumption.. if the loan does not qualify for an assumption, then buy it from them and get your own loan. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Oct 15th 2018
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,660 contributions

A true assumable loan would not trigger any due on sale clause, as the lender is very aware and participates in the transfer (assumption) of your loan to someone else. The only real assumable loans these days are FHA and VA loans, and the person must "qualify" to take over the loan, which means the existing lenders checks them out before letting the person take over your loan. I lend only in MN, WI, and SD, and can be reached at (651) 552-3681, NMSL274132

Oct 17th 2018
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