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Are Personal Guarantees Extinguished if a Mortgage is Assumed

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  • 10-02-2016, 06:08 PM
    lawfacts
    Are Personal Guarantees Extinguished if a Mortgage is Assumed
    An apartment owner is trying to refinance the property, and will have to personally guarantee the mortgage. The mortgage will be assumable. If he later sells the property and the buyer assumes the mortgage, will he be relieved of his guaranty?
  • 11-26-2016, 06:56 PM
    Mr. Knowitall
    Re: Are Personal Guarantees Extinguished if a Mortgage is Assumed
    That's a matter of contract -- and I wouldn't count on it. The borrower should check the contract language carefully and if, as I expect, his guaranty will remain in effect, he should either require that any buyer refinance or provide an acceptable substitute guaranty such that he is released by the lender from further obligation, as a condition of any sale.
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