Can a buyer assume my mortgage?
Can a buyer assume your mortgage and free you from the loan? Learn the fast, practical path that protects sellers and closes deals.
Quick answer
Yes — sometimes. A buyer can assume a mortgage when the loan is “assumable” or when the lender agrees to an assumption. But there are pitfalls. Know the difference between an assumable mortgage and a “subject-to” deal, who bears legal liability, and the exact steps to protect your equity and credit.
What makes a mortgage assumable
- Loans backed by government programs (FHA, VA) are often assumable.
- Some conventional loans are assumable, but they require lender approval.
- If the mortgage has a due-on-sale clause, the lender can demand full payoff on transfer.
Keywords: assumable mortgage, mortgage assumption, Mortgages & Liens, mortgage lien, buyer assumes mortgage.
Why sellers must be careful
If the lender does not release the seller, the original borrower remains legally liable. That means missed payments by the buyer can still damage the seller’s credit. A formal release (novation) is the only clean way to remove seller liability.
Practical steps to let a buyer assume your mortgage
- Check the loan documents. Look for “assumption” language and due-on-sale clauses.
- Contact the lender early. Ask about assumption procedures, credit requirements, and fees.
- Get buyer pre-approved. Lenders require buyer credit and income checks.
- Require a written novation or release. Do not accept verbal promises.
- Use escrow and clear title procedures. Order a title search to confirm any liens.
- Work with an experienced realtor or real estate lawyer to draft the agreement.
These steps reduce seller risk and speed closing.
Real example (short)
A seller had an FHA loan with 2.75% interest. Instead of refinancing at 6.5%, the buyer assumed the FHA loan after lender approval. Both parties signed a novation; seller was released. Result: seller avoided refinancing costs and buyer kept a low rate.
Why a mortgage assumption matters for Mortgages & Liens
Assumption transfers payment responsibility and can affect lien priority. Proper documentation updates the title and lien records. If done poorly, the original mortgage lien remains tied to the seller. That creates legal exposure and can block future property sales.
Fast checklist for sellers
- Verify loan type (FHA/VA/conventional)
- Ask lender about assumption policy
- Insist on lender release (novation)
- Use escrow/title services
- Consult a lawyer for contract language
How I help
I’m Tony Sousa, a local Realtor focused on Mortgages & Liens and smooth closings. I review your mortgage docs, contact lenders, coordinate novation, and manage title work so you leave the closing without hidden liability. I handle inside-out details so you keep the equity and protect your credit.
Contact me: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
If you want a fast assessment of whether your mortgage is assumable, send your loan statement and purchase agreement. I’ll map the path to a clean transfer or an alternative that gets you cash and zero risk.
