Home Assumption

Whether you are home owner wanting to have a quick exit from the property you have bought, or a home seeker trying to find the best deal out there through assumptions, we are here to help.

What is Home Assumption?

Home assumption may fall into 2 different categories: first is equity assumption and second is mortgage assumption (or Loan Assumption). Both of these forms of assumption results in the transfer of the name of the property without going through the actual sale process which involves payment of usual taxes.

Equity Assumption

In equity assumption, the property is not yet mortgaged and the Title is still under a developer. The registered buyer may still be paying the equity in installments, or the buyer may have finished paying the equity in full. For any reason, the registered buyer won't pursue with the property anymore and wishes another person to take over. The property is then marketed as "For Assume" either at original price, or at current selling value, or at a negotiated amount. Most of the time, the agreed amount falls between the original price when the property was bought (or reserved) by the registered buyer and the current market value. The obvious reason for this is so that both the registered buyer and the person who will Assume the property will be winners in the transaction.

It is important to note that not all property developers allow equity assumption. If they do allow, expect a considerable amount to be paid for re-documentation fees. 

Mortgage Assumption

Mortgage assumption is more complicated than equity assumption because of the legal implication involving the Title of the property. In this assumption process, the property owner (also the mortgagor) wishes to discontinue paying the loan but doesn't want the property to be foreclosed. Hence, he seeks for someone who could continue paying the financial institution for the remaining balance. A sum amount is also paid to the property owner to cover the costs from the time the property was purchased.