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An assumption occurs when the lender consents that another person or entity may assume the debt of another. For instance, if a parent dies and leaves an encumbered property to an adult child, the lender may allow the heir the right to assume the loan.
Assuming an existing loan is not the same as taking out a new loan. Moreover, simply transferring property title to another does not mean that the new owner has “assumed” the loan. In addition to liability issues, a loan assumption may result in serious tax liability to the parties of the transaction.
Before you close any loan assumption transaction or transfer title of a property subject to a loan, you should consult with an experienced attorney. David Speckman is a CPA, real estate broker and has practiced real estate law for nearly two decades. Mr. Speckman has the knowledge and expertise to advise you of the pros and cons of a loan assumption transaction and to provide assistance at all levels of the transaction. Call today to schedule a confidential consultation with Attorney David Speckman to discuss your unique situation.