In the example of an assumed home loan, none the house seller nor the lender is responsible for disclosing the information of your own financing. And therefore, the customer exactly who did not be aware that the assumed loan has an effective prepayment penalty term has no one fault but themselves.

“While i ordered my domestic two years before, I assumed the borrowed funds of your supplier. I recently applied to refinance, and are informed that we had to pay a great $5,000 prepayment penalty. The loan documents I was considering as i thought the loan provided a reality-in-financing mode one to identifies a prepayment penalty, but will not supply the number. I became advised that information come into brand new promissory notice closed of the earlier in the day manager, that i got never seen. I expected a duplicate of your own note regarding bank, and sure-enough, they suggests a penalty of 5% of brand-new home loan matter should your equilibrium are paid down in the first 5 years. Is to it had been announced for me as i believed this new mortgage?”

Yes, a full details of the latest prepayment penalty need become disclosed for you at the time your assumed the newest seller’s financial. Whose duty was it in order to guarantee the disclosure was created? Your very own.

The seller must have provided the notice, because the complete responsibility to own purchasing it actually was being managed to move on to you personally, however for specific reason he don’t. Maybe it had been destroyed. It absolutely was your own obligation to help you consult they, if in case owner didn’t have it, so you’re able to demand a duplicate regarding the bank, because you fundamentally did.

If in case someone’s loans in the place of studying the newest note is similar to to invest in a used car rather than operating they. Should you get trapped, there is no you to blame however, yourself. Read more “Who’s Responsible for Disclosures for the a thought Home loan?”