Assumable Loans FAQ
Many homeowners refinance after the death of a spouse or co-borrower. If you plan to refinance, submit a certified copy of your spouse’s death certificate with your County Recorder’s office, if the office has not already recorded it.
Taking this step will not affect the existing mortgage, but it does permit you to seek refinancing under your name. As a full-service mortgage company, we do offer refinancing options, including the Home Affordable Refinancing Program or HARP Refinance options. Please visit the Home Refinance page to explore all your refinancing options, or call us at 1-800-700-9212.
To learn more about loan assumptions, visit our Assuming a loan page.
When we receive a loan assumption inquiry, our Assumptions department reviews its eligibility. We mail a letter with the results. If it’s eligible, we request the necessary documents and process them. Upon approval, we send the new borrower a loan assumption package.
The loan assumption process usually takes 45-90 days. Completion times may vary, and be subject to change based on underwriting criteria.
The requirements to assume a loan may vary, depending on the type of assumption requested. Generally, the account must be current, and the person assuming the loan must live in the home. If the current borrower seeks release from liability for the debt, the assuming borrower must qualify for credit based on current underwriting guidelines.
Learn more about loan assumption requirements on our Assuming a Loan page.
Not all loans are assumable. Some VA and FHA loans are assumable, as well as some conventional loans. Find out your loan’s assumption eligibility by reviewing your loan documents and Loan Estimate or Truth in Lending disclosure.
If the new borrower is the beneficiary of a living trust and resides in the home, he or she may qualify for a loan assumption.
Corporations, partnerships, or LLCs are not qualified to assume loans.
We require a fully executed divorce decree or separation agreement. Either one must include a property settlement agreement with details about the proposed loan assumption.
To assume a loan, the assumptor or new borrower typically must qualify for credit based on current underwriting guidelines. If the new borrower qualifies, the previous borrower qualifies for release from liability for the debt, in most cases.
For VA loans requesting a release of liability from an ex-spouse when the veteran is retaining the property, please contact the VA Regional Loan Center.
A loan assumption is the only way to change the borrowers’ names on a loan agreement.