Can a Person Pay the Debt Owed on a House & Assume Ownership?

Acquire a home for less money.

Acquire a home for less money.

Don't think you can just pay off the mortgage on a home you want and it's yours. The owner must transfer the deed to you. However, there are circumstances where the owner may not have a choice. If the owner is behind in the mortgage payments, more is owed on the house than the house is worth, or the house has a lien against it, you may have an opportunity to pay the debt owed and become the new owners.

Short Sale

A short sale results when the homeowner wants to sell the home but its value is less than the mortgage. The homeowner must get permission from the mortgage holder to sell the house for less. When the transaction is closed, you pay the mortgage loan off through the closing process. This can be a good deal for both you and the seller. The seller avoids a foreclosure on his credit history and you get a house that may have the potential to increase in value because you bought it at a low price. You must have patience, as short sales can take several months to close.


It's not pretty but it's a fact: Good homes go into foreclosure. The owner was not able to -- or decided not to -- make the mortgage payments. The mortgage company goes through the foreclosure process and obtains ownership, and then auctions the house off to the highest bidder. The upside is that you can get the house for a screaming deal. The downside is that in some states, you must demonstrate you have the cash on hand to pay your bid amount in full immediately. In others, you must have with you a cashier's check as a deposit. If you can't pay your bid amount in full within a certain period of time, you lose the house and the deposit. Check with the trustee conducting the bidding to find out what's applicable to you.

Tax Lien Auctions

People who own their home outright with no mortgage still are obligated to pay property taxes. If they don't, the taxing authority can place a lien on the home, which may then be sold at auction to pay the taxes owed.


Homeowners who have not kept current with their financial obligations, other than their mortgage, may find themselves facing a judgment and subsequent lien against their house. The holder of the lien has the right to foreclose on the property. That would make sense if the market value of the home is greater than the mortgage and the lien amount. You negotiate with the lien holder to pay off the judgment. Unfortunately you then become the evil lien holder and foreclose on the property. You'll have to pay off the mortgage before you can obtain ownership of the house.

Assumable Loan

This is exactly what it says. The responsibility of paying the loan may be transferred to someone else. When the loan is transferred, the deed to the property is transferred at the same time. You have the responsibility to pay the debt. The mortgage documents will specify whether the loan is assumable. You may have to pay a fee to the mortgage company and be approved. So it's not a simple matter of just picking up payments. Do a title search before committing to the deal. The downside is that any outstanding liens against the property will remain unless you pay those off as well.


About the Author

Katie Jensen's first book was published in 2000. Since then she has written additional books as well as screenplays, website content and e-books. Rosehill holds a Master of Business Administration from Arizona State University. Her articles specialize in business and personal finance. Her passion includes cooking, eating and writing about food.

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