If you plan on financing a home by buying the seller's mortgage, knowing how to take over mortgage payments will be a fantastic idea. Although it is not a popular process, some people still practice it. Taking over mortgage payments can be very risky when not done correctly. In order to avoid all the risks, you must pay close attention to the following steps on how to take over mortgage payments.
To take over mortgage payments, you will need:
- Credit reports from all 3 credit bureaus
- Loan application
- Debts (credit card payments, student loans, etc.)
- Savings (any investment statements)
- Proof of Income (W2s, 1099s)
- Tax returns (current one and the ones from the last 2 years)
- Obtain approval from the lender. In order to take over mortgage payments, you must get approved by the lender who issues the seller's mortgage. You must fill out a loan application and submit all the necessary paperwork to the lender such as your debts, savings, proof of income and tax returns for the loan's approval. The lender will pull all your credit reports. The bottom line is that you have to meet the lender's qualification requirements just like their other borrowers.
- Determine the benefits. Once you are approved, the lender will give you an interest rate based on your application status including your credit scores. If the interest rate you are getting is lower than the market rate, taking over mortgage payments is a winner for you. Or else, there is no point to do so when the current market rates are really low. Why accept a mortgage with less favorable terms?
- Transfer the mortgage. You have decided to take over mortgage payments, and the process has been approved by the lender successfully. The lender will remove the seller's name on the mortgage. Instead, your name will be replaced. The same thing will happen to the deed of the house.
You see how easy it is to take over mortgage payments with my instructions. As long as the process is being done right, forget all the potential risks! Now, you should look forward owning your dream home.