Pay off a friends loan? How do you take over payments on a loan? Can you take over payments of a home? How do you take over payments on a home? Can you take over payments on a vehicle without putting it in your name? Is it better to pay off a loan right away for make some monthly payments first? You own the home and a friend will take over the payments; Can they get insurance? If you take over payments and they leave it in there name can you register it in your name?
I actually did this and it was the best financial thing I ever did. In 1997 I found a place that was rented out and the owners were sick and tired of their rotten tenants. I gave the owner $4000 and started making payments. I did NOT assume the loan. The loan stayed in the original owner’s name. I did however, take title 
to the property. I made the payment on time each month. People who have not done this all say the lender will call the loan. They could. However, consider that the loan I took over was at 10% and it was 13 years into the loan and the property was distressed….what bank would want to let go of a 10% interest loan with regular payments? Consider today that banks have so much inventory to deal with, and property is going down in value….do you really think they have the time or inclination to call the loan when someone is making the payments on time? NO.
When a mortgage is taken over the terms and conditions of the loan can be transferred from one borrower to a new borrower. The term ‘take over mortgage’ is also used to refer to an assumable loan.
Home buyers can assume a seller’s mortgage when purchasing a home with a take over mortgage payment. The approval of the lender is usually required before you can assume a mortgage. With a mortgage assumption the interest rate and the monthly payment schedule is assumed by you. This means you can save a lot with an assumed mortgage, especially if the interest rate on the existing loan is lower than the current rate on new loans. However, lenders can change the loan terms of these mortgages so you should be prepared for that.
September 12th, 2009 at 12:22 am
Yes, buying a house without strictly qualifying through the bank works if the buyer buys via “subject to existing financing.”
If the property is not behind on payments and has a fixed rate mortgage, the deed is transferred, and payments are made from the new buyer directly to the bank. There is no assumption, just payments. There is generally new fire insurance or co-insurance, and many times land trusts are used.
An addendum makes several very important notes and disclosures. You must get a letter from the seller stating that the seller knows that the loan has a due-on-sale clause, that you are not assuming the loan, and that the sale gives rise to the due-on-sale clause.
To protect yourself as the buyer, you will want to disclose everything in writing and have it signed by the seller.
If done properly, the due-on-sale clause, with the land trust, according to the St Germaine Act, will not be triggered.