​Loan Assumption Analysis
Keep the Mortgage Rate. Remove the Mortgage Liability.
A loan assumption may allow one spouse to keep the existing mortgage, including its interest rate and remaining term. During divorce, this can be especially valuable when the current mortgage rate is substantially lower than today’s available rates.
The Problem
Being awarded the marital home does not automatically give you the right to assume the mortgage. It also does not automatically remove your former spouse from the loan.
​A divorce agreement can require an assumption, but it cannot force the mortgage servicer to approve one.
​Before relying on an assumption, important questions must be answered:
01
Is the mortgage eligible for assumption?
02
Will the mortgage servicer approve the spouse keeping the home?
03
Does the retaining spouse have sufficient qualifying income and credit?
04
Will the departing spouse receive a written release of mortgage liability?
05
​How will the equity buyout be completed if the assumption does not provide additional funds?
06
​What happens if the assumption is denied?
The DMPLLC Solution
Being awarded the marital home does not automatically give you the right to assume the mortgage. It also does not automatically remove your former spouse from the loan.
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The existing mortgage and potential assumption eligibility
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The servicer’s process and qualification requirements
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Income, credit, debts, and mortgage payment history
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The potential release of the departing spouse’s liability
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Available strategies for completing the equity buyout
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The financial difference between assuming, refinancing, and selling
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Realistic deadlines and alternative plans for consideration in the divorce agreement