The Secret Of For Assume Balance (Pasalo) That You Need To Know
#assume balance #pasalo #assumption of mortgage
Here is what you need to know about Assume balance.
Assume balance or sale with assumption of mortgage is basically buying a property through loan or equity assumption.
There are a lot of reasons why buyers would want to have their property for assume. It can be because, as I mentioned, they lost their jobs and wanted some cash on hand. It can also be because they moved to another location or they need cash because of some emergency. They call it a sacrifice sale or a distress sale. This is a type of transaction that is often unplanned, and you are forced to be flexible and don’t have much leverage making you open for even lowball offers.
The other scenario is where the assume balance is part of your plan. You buy a property at its introductory or preselling price and after a few years of construction or when the value of the property has increased, you have someone assume the remaining balance, and buyer pay you a lump sum plus premium. This is a type of transaction wherein you have more leverage and can demand premium because you can afford to wait until a better offer comes.
Now you can assume balance in 2 different stages.
First is during the equity period. This is the period where you still process transfer thru the developer. You need to pay a transfer fee, or redocumentation fee usually between 20-25k and sign the waiver of rights to signify that you have waived and transferred your rights to the new buyer. The new buyer will then pay the reservation fee and submit the same set of requirements to the developer.
The second stage is after the loan takeout or during the amortization process. This is the part where you are already paying monthly amortization with the bank, pag ibig or inhouse financing.
Now there are 2 ways to go about this. The easy but risky way or the harder but safer way.
Let us start with the easy but risky. This is called an internal agreement where transfer of ownership happens upon full payment. So even if the buyer takes over payments and moves in to the property, the owner of the property is still under the name of the seller. This can be an option for buyers that have money but don’t have financial documents needed by banks or pag ibig or have been denied with a housing loan before.
The next option is the harder but safer way. This is the immediate change of ownership.
To do this you need to execute three documents.
First is the deed of assignment. This legal document is one of the important documents in the loan assumption process because it is stating that the seller is transferring the contract’s obligations and benefits to you. It will also include an outline of the terms and conditions you and the seller agree on.
Then you need to process the Notice of Assignment of Contract. Since this involves a third- party lender or creditor like bank or pag ibig, you need to notify them in writing about your agreement. This is very important so they will know that moving forward you’re the one settling obligations and receiving benefits.
And the last needed document is the Deed of sale with assumption of mortgage. This is a document expressing the buyer pays the seller and the buyer now owns responsibility with the assumption of mortgage. The buyer will then take over the mortgage payment until property is fully paid.