Assumption of Mortgage in Florida
Assumption of mortgage is the formal process by which a Florida buyer takes over the seller's existing mortgage with the lender's consent, inheriting the loan's terms, interest rate, and remaining balance.
The Assumption Process
The buyer applies to the existing lender, submitting credit, income, and asset documentation. The lender underwrites the buyer under its current qualification standards. Upon approval, the parties execute assumption documents that substitute the buyer as the primary borrower. The lender charges an assumption fee (typically 0.5-1% of the remaining balance), which is significantly less than the origination costs of a new mortgage.
Assumption vs. Subject-To
Florida buyers should understand the distinction between a formal assumption (with lender consent) and purchasing "subject to" the existing mortgage (without lender consent). Subject-to transactions are riskier because they may trigger the due-on-sale clause, and the original borrower remains fully liable. Formal assumption provides legal certainty and may include a release of the seller's liability.
Related Terms
Barnes Walker Real Estate
Barnes Walker handles mortgage assumption transactions throughout Southwest Florida. Contact our real estate team for guidance.
Florida Law Reference
Fla. Stat. Ch. 697
Defines mortgages as liens on real property and establishes requirements for mortgage creation, assignment, and satisfaction in Florida.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC