Posted by John Merchant on December 07, 2007 at 16:40:56:
I’d recommend going slow in agreeing to do any formal “assumption” as it really does nothing for the seller* and just puts your credit on the line.
I’d guess at least 75% of all bank loan “take overs” these days are not done by assumption of bank debt, but by merely taking them over “subject to” the bank loans.
Also I’d venture that there are loan officers who’ve never seen a real “assumption” of a loan.
Undoubtedly there are sellers who still think having a buyer assume their debt is going to release that seller…but it’s not true as the bank just adds the B to the note, not releasing the S from the note, and now both S and B are liable on it.
I know almost nothing about PA laws so I’d want to check PA Statutes and see what they’ve done to “sub to” buying, if anything. Some states have tried to limit such by legislation and PA might be one of them so be sure you know its laws before doing any REI deal there.