How to Qualify for a Non-Assumable Mortgage
Assumable and non-assumable mortgages are various types of mortgages. Since the 1990s, the majority of the loans made in the US are non-assumable mortgages with "due-on-sale" clauses. These clauses can force the borrower to pay the entire loan if the house is sold. However, there are many assumable mortgages made prior to the 1990s, as well as some made after, that can be assumed under the same terms and conditions of the original contract. Qualifying for an assumable mortgage simply means you'll take over the payments of an existing mortgage.
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Things You'll Need
- Mortgage paperwork
- Mortgage statements
- Password for online mortgage banking
- Bank statements
- W2s
- Tax returns
- Paychecks
Instructions
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How to Qualify for a Non-Assumable Mortgage
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1
Research homes that you'd like to purchase.
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2
Speak with your realtor about assumable mortgages. The agent may know of some listings that have assumable mortgages. Make sure to visit these listings first.
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3
Do not be discouraged by "due-on-sale" clauses in mortgages. These clauses do not necessarily mean you cannot assume the mortgage. It's possible to simply assume the mortgage from the seller and take the risk that the bank will not call the loan due.
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Speak with the seller about assuming the mortgage---not all sellers are interested in simply signing over the mortgage. In some cases, especially when the transaction was handled incorrectly, the previous seller has been negatively affected when the bank calls a loan due.
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5
Speak with the mortgage company who owns a loan with a "due-on-sale" mortgage you'd like to assume. Ask permission first to assume the mortgage. In most cases, the bank will first want to double-check your credentials.
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Provide employment history (six paychecks, at least two W2s), tax returns, a copy of your credit report, and twelve months of bank statements. This will give the mortgage company a good overview of your creditworthiness and ability to repay the existing loan.
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7
Assume the mortgage with the bank's consent.
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