Can you Transfer a Mortgage?

Can you transfer a mortgage? There may come a time when you want to stop making payments, and you're lucky enough to have somebody willing to take your place. It may be ideal to transfer the mortgage into their name. However, it can be difficult or impossible to transfer mortgages.

Assumable Mortgages

An "assumable" loan means you can transfer the mortgage to somebody else. However, there are some restrictions. Lenders want to make sure you transfer the mortgage to somebody who will continue to pay. That person needs to have decent credit and sufficient income.

• What Is Credit?
• Debt to Income Ratios - Basics

The lender does not want to see you transfer your mortgage to somebody who's less likely to pay off the loan. They'd rather keep you on the hook if there's a better chance of collecting money from you.

In general, it is difficult to transfer a mortgage. Your best bet may be if you have an FHA loan or VA loan.

• FHA Loan Basics

Mortgage Refinancing

Instead of transferring a mortgage to somebody else, you may be able to refinance the loan. You repay the old loan, and replace it with a brand new one. Again, someone has to qualify for the loan with acceptable credit and income levels.

• Mortgage Refinancing Basics

"Unofficial" Transfers

It may be tempting to transfer a mortgage "unofficially". You can get creative, and you can also get in trouble. Lenders may forbid some of the strategies that come to mind. In addition, you are still on the hook - financially responsible for repaying the loan - unless you do things officially.

How to Move Forward

If you want somebody to assume your mortgage, do it the right way. Talk with your lender to see if you can transfer the mortgage to anybody else, and what the requirements are.

In cases of death, divorce, or "less formal" sales, work with an attorney. The fees you pay may save a lot of headaches and money down the road.

• Why Can’t Divorce Split Loans?