DEFINITION of 'Transfer of Mortgage'

A transaction where either the borrower or lender assigns an existing mortgage (bank loan to purchase a residential property) from the current holder to another person or entity. Homeowners who are unable to keep current on their mortgage payments may seek a transfer so that they don't default and go into foreclosure.

Not all mortgages are eligible for transfer. In order to transfer a mortgage, the lender will need to verify that the person or entity that will assume the mortgage has adequate income and credit history to be able to make payments in a timely manner.

BREAKING DOWN 'Transfer of Mortgage'

If you are not allowed to transfer a mortgage, due to the loan's underwriting, you may need to explore other options to avoid foreclosure. For example, you could work with your lender to see if it's possible to add another borrower/owner to the mortgage which would enable him/her to make payments toward the unpaid loan balance. Or you could sell the home and have a potential buyer, colleague, family member or another entity agree to make up any difference between the home's sale price and the unpaid loan balance.

RELATED TERMS
  1. Mortgage Rate

    The rate of interest charged on a mortgage. Mortgage rates are ...
  2. Serious Delinquency

    When a single-family mortgage is 90 days (or more) past due and ...
  3. No-Cost Mortgage

    A mortgage refinancing situation in which the lender pays the ...
  4. Third-Party Mortgage Originator

    1. A person or company involved in the process of marketing mortgages ...
  5. Wraparound Mortgage

    A type of loan that enables a borrower who is paying off an existing ...
  6. Satisfaction of Mortgage

    A document generated and signed by a mortgage lender, acknowledging ...
Related Articles
  1. Personal Finance

    How Do Mortgage Lenders Get Paid and Make Money?

    When homebuyers educate themselves on how mortgage lenders get paid and make money, they are more likely to save thousands of dollars on their mortgages.
  2. Personal Finance

    Top 6 Mortgage Mistakes

    These common errors could end in foreclosure.
  3. Personal Finance

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  4. Investing

    Saving Your Home From Foreclosure

    Learn the tactics you can use to prevent your home from being repossessed.
  5. Personal Finance

    7 Mortgage Trends To Expect In 2011

    How will the year compare to 2010? What's likely to be different?
  6. Personal Finance

    How to Work With Your Lender if You Can't Pay Your Mortgage

    Homeownership is a dream but when you can't pay your mortgage it becomes a nightmare. In the wake of the housing meltdown lenders are more willing to help.
  7. Investing

    Financing Basics For First-time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  8. Personal Finance

    Shopping for a Mortgage in 2017? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2017 can all be done online.
  9. Investing

    Avoiding Foreclosure Scams

    If you want to save your home, avoid bogus offers and take matters into your own hands.
  10. Personal Finance

    5 Things You Shouldn't Tell Your Mortgage Broker

    Applying for a mortgage can be a strenuous process. Here are five things to avoid doing when meeting with your mortgage broker.
RELATED FAQS
  1. If My Mortgage Lender Goes Bankrupt, Do I Still Have to Pay My Mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Here's what usually happens ... Read Answer >>
Trading Center