Assuming a Mortgage as a Solution To Raising Interest Rates

[William Coet]

Hello,

For a mortgage with a regional bank, can it be assumed by the buyer so that they can keep the lower interest rate (4.1%) instead of having to make a new mortgage at 6.5%?

Thank you

[Riaz Gillani]

Some of the answers above seem to be a little coy ... so in most circumstances - NO. Certainly not conventional loans. Some government issued loans may be. And the current owner of record could read his loan docs or ask their lender to be 100% sure. But conventional or private lenders don't allow payments to transfer from person to another with the exception of some unique circumstances (Death, Divorce, transferring to a family member or when a Living Trust is at large). It doesn't really benefit them (unless the current borrower is at risk of being default).

They instead have a "Due-On-Sale" clause. If title transfers - via purchase, transfer deed or whatever other mode - the mortgage is required to be paid in full.