What is an assignable mortgage?

An assignable mortgage is a type of mortgage agreement in Virginia that allows the borrower to transfer their interest in the loan to another person. This means that the person receiving the assignment can take over the obligation of making payments to the lender. This type of mortgage is most often encountered in the residential real estate market, where it is used to facilitate the transfer of a home loan from one party to another. When a mortgage is assigned, typically the lender must agree to the transfer. The new borrower must either assume the terms of the loan (including interest rate, term length, and principal balance) or the lender may require them to re-negotiate the terms before the assignment is accepted. The most common circumstances under which an assignable mortgage is used is when a buyer purchases a home from another buyer who has already taken out a mortgage loan. In this case, the buyer agrees (in writing) to assume the existing loan and the lender must approve the transfer. This allows the seller to avoid having to pay off the loan in full before the sale of the home and the buyer can avoid having to apply for a new loan and incur the associated fees. Aside from home sales, assignable mortgages may also be used when a borrower is unable to make the payments and assigns the loan to someone who can in order to avoid defaulting on the loan. This transfers the responsibility of making payments to the new borrower, while the original borrower is still legally liable for the loan.

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What is an assignable mortgage?

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