Contrast “Freely-Assumable” Mortgages And “Qualified” Assumptions?
August 30th, 2008 By Peter G. Miller
With a freely-assumable loan a new borrower can take over the mortgage payments without lender approval or a check of borrower credentials.
With a qualified assumption, the buyer must meet the lender’s current qualification criteria to assume the loan. Once cleared by the lender, the original borrower can sometimes obtain a release of liability and not have a responsibility should the lender foreclose on the new borrower.
In practice, there are few freely-assumable loans outstanding at this time.
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