Before a buyer relies on an assumption of an existing VA loan in Florida, what lender action must the buyer confirm to proceed and address the original borrower’s liability?
Correct Answer
B) The lender must approve the assumption and release the original borrower from liability
Correct: VA loans with due-on-sale clauses require lender approval for assumption and release of the original borrower. Why not A: Assumptions are not automatic with due-on-sale clauses. Why not C: Assumptions are not prohibited, just regulated. Why not D: Credit qualification is required for approved assumptions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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