Will a mortgage lender accept a notarized separation agreement for a loan assumption?

UPDATED: Sep 30, 2022

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Will a mortgage lender accept a notarized separation agreement for a loan assumption?

I am divorcing and keeping the house by assuming the loan. The separation

agreement has been drawn up by both parties and agreed to. Is there further a process to have it be recognized as a legal separation or will it be recognized if it is signed in front of a lawyer by both parties?

Asked on December 30, 2016 under Real Estate Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

It's up to the lender what to accept--and whether to allow assumption at all. While you should check the mortgage agreement itself to be sure, the vast majority of mortgages have "no assumption" or "no assignment" clauses--that is, there is no right to assume a loan, and it can only be done with lender consent, which consent must be voluntarily given--i.e. it can be withheld for any reason. So it's up to the lender whether to allow you to assume the mortgage and, if so, what is required to do that. Bear in mind that your separation or divorce agreement has NO bearing on the lender: the lender is not part of your marriage, is not a party to your divorce, and is in no way bound or affected by the separation agreement between you and your soon to be ex-spouse. So they can ignore the agreement and not allow the assumption if they choose. You may have to instead refinance in your name alone.

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