Wells Fargo Assumption Agreement

Wells Fargo Assumption Agreement: What You Need to Know

If you`re about to enter into a real estate transaction where the property has an existing mortgage, you may come across the term “assumption agreement.” This is a legally binding contract that allows one party to take over the existing mortgage without having to obtain a new one. One such assumption agreement is the Wells Fargo assumption agreement, which is used when acquiring a property with a Wells Fargo mortgage.

So, what exactly is a Wells Fargo assumption agreement and why might you need one?

What is a Wells Fargo Assumption Agreement?

A Wells Fargo assumption agreement is a legal contract that allows parties involved in a real estate transaction to transfer an existing Wells Fargo mortgage from one party to another. In most cases, the agreement is used when the buyer of a property wants to take over the seller`s existing Wells Fargo mortgage instead of obtaining a new one.

Who is Involved in the Assumption Agreement?

The Wells Fargo assumption agreement typically involves three parties: the buyer, seller, and Wells Fargo. As with any assumption agreement, the original borrower on the mortgage (in this case, the seller) is released from their obligation to pay the mortgage, and the new borrower (the buyer) assumes the responsibility for payment.

Why Get a Wells Fargo Assumption Agreement?

There are several reasons why a borrower may choose to obtain a Wells Fargo assumption agreement. For example:

– It may be easier to obtain an assumption agreement than to apply for a new loan, particularly if the borrower`s credit history has changed since they first obtained the mortgage.

– The interest rate on the existing Wells Fargo mortgage may be lower than what the buyer could obtain on a new mortgage.

– The lender may waive some or all of the closing costs associated with obtaining a new mortgage.

How to Obtain a Wells Fargo Assumption Agreement

To obtain a Wells Fargo assumption agreement, the buyer and seller will need to work together to complete the necessary paperwork. This will typically include an assumption application, a credit application, and other supporting documents. Additionally, the buyer may need to provide proof of income and agree to other terms and conditions set forth by Wells Fargo.

It`s important to note that not all mortgages are assumable, and those that are may require a fee or other costs to obtain the assumption agreement. Additionally, the buyer will need to be approved by Wells Fargo, and the lender will want to ensure that the buyer`s creditworthiness and ability to pay the mortgage are in line with their lending standards.

In conclusion, a Wells Fargo assumption agreement can be a useful tool for those looking to take over an existing mortgage. However, it`s important to understand the terms and conditions set forth by Wells Fargo and to work closely with the seller to ensure a smooth transaction. As with any real estate transaction, seeking the advice of a qualified real estate attorney or professional can help ensure that you understand your rights and obligations under the agreement.