Transfer of Mortgage
What is '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.