Sale With Assumption of Mortgage: How Does It Really Work?

Posted by: Nimrod Flores in Real Estate Financing, Real Estate Investing, Real Estate Laws On:March 23, 2016 Last updated: July 11, 2016

One of the less common way to sell a property is through a Sale with Assumption of Mortgage. And because it is not the usual way of selling real estate, many people are not familiar with it. We even see people getting turned off by a property being offered for sale, just because it is still mortgaged to a bank or any other financing institution.

The usual and simplest way to sell real properties is through an “Absolute Sale”. This is what many people are familiar with. Some even assume that it’s the only way to sell properties. But that is not true.

An owner can validly sell his property even when it’s currently attached to a debt (loan). And in most cases, this is even advantageous to the buyer. It usually means lower prices and huge savings because owners who sell in situations like this, are usually in immediate need of money.

So… How does it work?

First, let’s understand what a mortgage is. A lot of people have been using this in the purchase of their property but too few actually understand what happened and who they are really indebted to.

It’s evident in buyers of properties from developers. A lot of them think that they are still indebted to the developer even after they have mortgaged the property to the bank to pay the developer.

So anyway, a mortgage is simply a debt with a “collateral” or “security”. This collateral is the real estate property. It is called “security” because in the event the debtor fails to pay his debt, the lender (creditor) will be able to take the property instead.

Here’s a more technical and complete definition of a mortgage from Investopedia:

A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire value of the purchase up front. Over a period of many years, the borrower repays the loan, plus interest, until he/she eventually owns the property free and clear. Mortgages are also known as “liens against property” or “claims on property.” If the borrower stops paying the mortgage, the bank can foreclose.

Because the property is an integral part of the debt agreement, people think that the property cannot be sold until the debt is paid up.

But actually, it can be. The buyer will just have to agree that he will assume the obligation to pay the remaining debt, to avoid complications later on.

In fact, the buyer is not even required by law to assume the mortgage. But the property is nevertheless subject to the mortgage agreement between the seller and his creditor. So, to ensure that the debt will be paid, it is practical and convenient for the buyer to just assume the mortgage. (See Articles 2126, 2129 and 2130 of the New Civil Code)

So, here is how a “Sale with Assumption of Mortgage” works:

The buyer pays the seller a certain amount for the property. The buyer now owns the property. But the sale also comes with the responsibility to repay the creditor (mortgagee) for the remaining debt of the seller.

It follows, of course, that the amount of the outstanding debt is considered in negotiating the price of the sale.

Let’s say the value of the property is P10M and there’s still an outstanding mortgage debt of P5M. The buyer may pay the seller only P5M and assume the obligation to pay up the remaining debt of P5M to the creditor. And it’s up to the buyer to negotiate with the seller for the actual purchase price.

The other important thing to mind

Despite the seller and the buyer being totally clear as to what’s going on, their consents alone may sometimes be not enough. If there is a stipulation in the mortgage contract that says the creditor’s permission is required before the property is sold and therefore, the mortgage debt transferred to another person, it has to be respected.

In the cases decided by the Supreme Court, it was held that the consent of the creditor (or more appropriately, mortgagee) must be given, for an assumption of mortgage to be valid. The following are just two of those cases:

Cruz and Cruz v. CA and GSIS (GR No.90369 October 31, 1990)
Bonnevie and Bonnevie v. CA and Philippine Bank of Commerce (GR No.L-49101 October 24, 1983)

Aside from complying with existing jurisprudence, this will also serve other practical purposes:

The creditor will know from whom it should collect payments for the debt, after the sale.
When the debt is all paid off, the creditor will know to whom the Title will be released.
In some cases, especially with banks, a new Title in the name of the buyer will have to be processed. So, they have to know about the sale and who the buyer is.

Key Takeaway

This may already be trivial to the person exposed to real estate transactions. But to the beginner, the first thought that comes to mind when a property is still mortgaged, is that they should not buy it.

Don’t be too quick. Opportunities are found in seemingly difficult situations. And in cases like this, contrary to what many people believe, mortgaged properties can actually be validly sold. There’s just an added layer of complexity. Actually, it’s just a couple of stipulations in the contract and an additional paper to sign that make all the difference!

But from that, you can take advantage of being in a better position to negotiate a better price for the property!

Are you interested in great deals on properties offered for sale with assumption of mortgage?

Check out the following unit in Signa Designer Residences for assumption:

SDR Tower 2, Unit 17J for assumption →

ABOUT THE AUTHOR

Nimrod Flores

Nimrod is the co-founder of PPE Inc. and our Tech Officer. His experience in real estate started when he bought a tax-delinquent property auctioned by the government back in 2007. He’s currently studying law at the San Beda College of Law.

roxanne

Hi, Good day! would like to ask lang po kung papaano po ang Assumption of Mortgage sa Pag-ibig? We are planning na kasi na ibenta ung nakuha naming bahay. I mean the step by step process on what to do (The process )

May fee po ba babayaran sa pag-ibig para matransfer ang title sa bagong buyer? Kapag po ba nasa pag-ibig pa din may binabayaran na din na Capital gain tax, doc stamp, transfeer fees etc. pag binenta ko sa mag aassume ng balance ko?

Thank you po sa help.
- Nimrod Flores
  
  If you’d like details specific po sa Pag-ibig, the best place to get that info would be from Pag-ibig themselves po.
epi cadion

hi po nakasangla sa calamba rural bank lote ko almost a year na hindi ko nababayaran it is possible po ba na matutulungan nyo ako na matake out at malipat s ibang bank na contact nyo?
Hector

Hi i just want condo unit with assumption of mortgage to be sold. Please help me on how will i do it.
Jong Dela Cerna

hi what the name of the contract to sign in assuming a mortgage?
- Nimrod Flores
  
  It’s usually entitled “Deed of Sale with Assumption of Mortgage” but you are free to title it however you think is appropriate.
Ivory Delos Santos Delin

Hi! I understand that i must visit pag-ibig office soon. I just want to inquire so i can prepare necessary documents before i proceed. I sold my unit that i got thru pag-ibig housing loan. I want to have another housing loan by transferring obligation to the buyer, is that possible? How soon is the transfer and will i be approve for a new housing loan?
mark igot

Hi good day! ask lang ko kong paano po makakuha nang land title sa nabili nang aking mga magulang kong ang document na hawak namin ay ang deed of sale ay walang notaryo ang problema dito ang nabilhan ay pumanaw na is this document is valid by filing a land title…….if not what should i do?
- Nimrod Flores
  
  Your situation po is too complicated to answer in great detail here sa comments section. I recommend availing the services of professionals who are experienced in handling these kinds of situations. You can avail of our Titling services if your property is here in Metro Manila or in the nearby provinces, or you can hire a lawyer or another licensed broker/firm who’s experienced in these situations.
Gelo

Hi! ask ko lang pano mabebenta or magamit pambayad sa bagong real estate property yun real estate property din? naka bank financing kami pero may existing property kami na mahirap maghanap ng buyer. since residential lot sya sa camella.
- Nimrod Flores
  
  It can all be done in a contract.
  
  The only thing you have to think about is convincing your bank to take your other property as payment for your existing loan. I imagine this will not be easy. If you’re having a hard time selling it yourself, then it’s very likely that the bank will not want it also. Tapos may marami pang documentations which is another reason for banks not to get into a deal like this.
  
  Ang mas madali siguro is just to take out a loan from the bank using that other property as collateral. And then yung proceeds ng loan nyo, yun ang gamitin nyo pambayad sa existing mortgage na gusto nyo bayaran ngayon.
Tina Tolentino

hi ask ko lang pwede ba bumili ang buyer ko through other bank loans, like purchase mortgage by other bank to buy it out from the old lender?
- Nimrod Flores
  
  Yes. Some financing institutions are actually offering this kind of service. It’s basically similar to a “transfer of balance” that these credit card providers are marketing.
Carlo Castillo Yanson

Good day po! Paano po if we will assume a house and lot. What are the legal documents should we request or produce po once nagbayad na kami ng amount requested by the seller? What documents will prove that the we’ll be the one paying for the balance sa developer or bank? and other documents na need namin para if ever magkaroon ng discrepancies, we’ll have proof that the ownership of the house is under our name na? Your reply is much appreciated. God bless!
- Nimrod Flores
  
  You’re going to need almost the same list of documents we have listed on the following post:
  
  How to Transfer Real Estate Titles in the Philippines (From a Sale)
  
  But instead of the Deed of Absolute Sale, you would be needing a Deed of Sale with Assumption of Mortgage. You’ll have to ask for a copy of the mortgage contract from the seller also. And don’t forget to secure the written approval of the mortgagee.
  
  If you’d like to be sure you’re doing it right, engage the services of competent professionals. It can be a good lawyer in your area or a knowledgeable and experienced broker. If the property is somewhere here in Metro Manila or nearby provinces, you may look into our services.
Aldrin Lee Lanuza Corpuz

Hi, just want to ask if the vendee of the assumption of mortgage fails to pay the agreed payment to the vendor on top of their payment to creditor for several times as agreed, can we, the vendor,
take the property back? Note that there is no written proof stated from the DoS document.

Thanks a bunch!
- Nimrod Flores
  
  That’s one option. The other option is just to compel the buyer to pay those overdue amounts. In both cases, you will need to take the matter to the courts.
Matapang Ako

Goodmorning, iaask ko lang po. Currently kasi may nagbebenta ng house and lot sakin pero may balance pa siya sa pagibig and ittransfer nalang sakin yung pagibig loan niya. Anu po need and possible ba matransfer yung title sakin once ako na nagtuloy ng pagibig loan
- Nimrod Flores
  
  What you need is to execute a Deed of Sale with Assumption of Mortgage, and to secure the written approval of Pag-ibig about that sale. Further details are explained in the above post po.
Mike Castro

Hi,ask lng po ako kung pede pa po ba i apella ang case after the supreme court decided na talo kami,but im not convince due to our lawyer is not expert about foreclosed housing cases..?
- Nimrod Flores
  
  You can still file a motion for reconsideration as long as hindi pa po naging final and executory ang decision.
Marie Joy Capada

Hi Sir Nimrod, first of all, thank you for this blog po. Matanong ko lang din po sana, my parents have an exisiting mortage s bank for our house, but we want to transfer it to pag-ibig po under my name. Would it be possible po? Your help will be greatly appreciated po. Hoping for your response po.. Salamat ng madami.
- Nimrod Flores
  
  Yes, I think that’s very possible. The situation you described is one of the purposes enumerated by Pag-Ibig for which members can avail housing loans. See items no. 5 and no. 3 under “Housing Loan Availment” in their Citizen’s Charter.
  
  Of course, you still have to qualify for their other requirements.
  - Marie Joy Capada
    
    Thank you so much po for the feedback and reference. We visited their office, and the officer told us its not allowed. We will visit again. Thank you!
Manuel Diaz Azcuna

Hi Sir,Good morning.Magtanong lng po ako tungkol sa lupa na binili namin na Absolute Sale a Portion at nalaman ko ito ay na loan pala sa bank.mayroon po kaming Deed of Absolute Sale at hanggang ngayon hindi pa po na annotate ang name namin sa Title dahil ito po ay naka loaned sa bank.Ano po ang mga paraan na gagawin namin pra mapatunayan na nabili namin ang lupa or a Certification lng sana.Maraming Salamat Po.
- Nimrod Flores
  
  Yung Deed of Sale na po mismo ang pinaka-proof ninyo na binili nyo yung property na yun. Kaya lang, nauna nga lang yung bangko, sila po ang mas may karapatan. Yung hahabulin nyo po dyan ay yung nagbenta sa inyo. If willing pa naman sila to work with you on correcting the matter, you should execute a proper Deed of Sale with Assumption of Mortgage and be sure to get the permission of the bank about that sale.
  - Manuel Diaz Azcuna
    
    Thank you very much po Nimrod.Sorry po sa late reply.
    - Nimrod Flores
      
      You’re welcome. No worries sir.
  - Name
    
    Hello po. I have similar situation po.bumili ng lupa tapos ng nag pa transfer of title na kami, nalaman may loan pala sa bangko. Ang problema mo, hindi nakikipag-coordinate ang may-ari para maka gawa ng Deed of Sale with Assumption of Mortgage. Ano po ba sir ang pwedeng gawin ditto? Thank you po
Inna Nicole Sumalnap

Hi Sir. I am interested to assume the balance of a unit. Hindi pa niya naiipasok sa financing kasi nagbabayad pa lang siya ng down payment (installment basis) pero naturnover na sa kanya yung unit. So bale ang i-aassume ko is yung remaining installment sa down payment saka yung remaining balance. Same process rin kaya ito sa namention sa post?
- Nimrod Flores
  
  What you’re describing seems like the very common selling practice by developers. If this is the case, I would assume the original contract is only a “contract-to-sell” pa lang. This means hindi pa nakapangalan sa seller yung property. All he has is just that exclusive right to buy that particular property.
  
  And since wala pang mortgage na-involve, it will be different from the post above. It will not be a sale with assumption of mortgage. Aside from that, you are not actually buying the property itself from the seller. You are only buying his right to buy that property from the developer (the original seller). This is just a matter of replacing his person in that original contract-to-sell/buy. Developer na usually nagbabago ng contract na yun, you just have to inform them about your assumption of the purchase.
  - liezl caasi
    
    hello sir Nimrod, salamat po sa mga sagot sa mga tanong nila, very helpful po, hindi ko po alam kung related po ito sa ask ni Ms. Inna. Im also planning to buy a condo n with assume balance din po. 10yrs po sya nka bank financing nagstart nung april 2017. paano po yun un sa bank ano mga need nila sa amin pra ma approve po kami na ang mag continue ng remaining balance. kng babayaran po b nmin un unang mga nagastos na nun seller.. paano po un sa bank my mga babyaran p po b kmi?? tska meron po kmi existing pag ibig housing i allow nmn po b kmi??? salamat po
    - Nimrod Flores
      
      For sure kakailanganin po talaga nila yung Deed of Sale w/ Assumption of Mortgage dyan. But that’s just one thing. Meron pang mga supporting docs yan like ID’s, affidavits, forms to fill out, etc.
      
      Not all of these supporting docs are standard, so different banks have different lists of requirements. To get a reliable answer mam, the best place to go to would be yung bank nyo talaga. Ask to talk to their mortgage/loans officer, sila yung makakasagot ng specifics po dito.
  - Sharon Sagaral
    
    Good morning Sir Nimrod. I am planning po sana to sell the unit namin (CTS) state palang pero 1 year installment nalang. ano po ang process sa ganitong pag sell ko ng right? Thank you and more power.
    - lhai robinsonsland
      
      Hi Ms Sharon, usually pag CTS state palang, you have to submit a request letter to the developer to allow you to transfer the purchase to your buyer. Some developer charge processing fee for transfer of buyer ranging from 10,000 to 50,000 pesos. Si buyer na mag-apply for bank financing/mortgage sa balance.
      
      [email protected]
      - Sharon Sagaral
        
        Thank you so much for the information. How about if we decide to cancel the purchase and surrender it back to the developer? Are we going to get our money back? If yes, how much of our payments made will be reimbursed? Thank you and more power.
      - Nimrod Flores
        
        That would depend on the circumstances of the cancellation. You may want to also read the following related posts for detailed discussions:
        
        Defaulting Payments – Rights of Buyers under the Maceda Law
        PD 957 – Refunds in case of Fault on the part of the Developer
    - Dean Michael Ancajas
      
      Hi nabenta po ba yung unit ninyo? I’m at the same stage.
Diego Mendoza

Hello Sir Nimrod, medyo di related sa article yung unang tanong pero sana po matulungan niyo ako. May condo unit po kasi ako dito sa Cebu, kaya lang dahil lilipat ako ng trabaho sa NCR, ibabalik ko po sana ito sa developer. More than 2 years na po akong nagbabayad ng mortgage kaya based sa Maceda Law dapat may 50% refund ako diba?. Pero nung humingi ako ng estimate sa agent, sabi niya may ibabawas din daw na tax at agent fees. Pwede po ba yun? Based sa binigay sa akin na estimate halos 25% na lang yung refund na babalik. Tapos sabi pa nung agent bagong policy lang daw nila to, kung last year ko daw binalik yung unit, yung 50% pa daw makukuha ko.

Second question po, may nagoffer kasi sa’kin na iassume na lang daw niya yung unit. Ano po ba ang cons nito sa akin. Pag po ba inassume na yung unit wala na akong legal obligations dito? Halimbawa pag hindi nakabayad ng mortgage yung nagassume, wala na po ba itong epekto sa’kin? Maraming salamat po.
- Nimrod Flores
  
  As to your first question, baka di lang tama yung paliwanag ng agent nyo sir. Hindi po kasi optional ang provisions ng batas. Meaning, hindi po policy ng developer ang masusunod, kaya hindi pwedeng hindi nila sundin ang provisions ng Maceda Law dahil lang nagbago sila ng policy last year. The law always prevails over the policies of private companies kung may conflicts.
  
  That said, it also doesn’t automatically mean na you are really entitled to at least 50% refund. You mentioned kasi that the unit is under a mortgage na.
  
  Being under a mortgage means that you are not anymore paying installments to the developer. If your case is like the usual, I’d presume you availed of a financing service from a bank or other financing provider. This means the bank has already paid the developer in full.
  
  As far as the developer is concerned, wala na po kayong utang sa kanila and bayad na in full yung property. But you on the other hand, now have a debt to the bank. That debt now, is secured by the property – meaning kung di nyo mabayaran yung utang na yun, the bank will take the property instead of forcing you to pay in cash. Yun po yung mortgage nyo.
  
  Ngayon, yung Maceda Law sir, it doesn’t apply to mortgage contracts. It only applies to property sales under installment payments. See [this article] for full details.
  
  As to your 2nd question, yes the Sale with Assumption of Mortgage will transfer all rights and liabilities to the buyer. This is one reason why the law requires the permission of mortgagee for the sale to be valid. After the sale, na sa buyer na yung lahat ng obligation under that mortgage.
  - Diego Mendoza
    
    Ay kasi po inhouse financing po yung inavail ko na option, so sa developer pa po kami nagbabayad ng installments. Sila pa po mismo nagexplain sa akin sa Maceda Law before turnover nung unit. Kaya po ako naginquire sa kanila ng estimate ng refund kasi sila mismo nagemphasize na may refund as long as nakapagbayad ako ng at least 2 years.
    
    Then sa binigay nilang estimate, nakabreakdown talaga yung amounts:
    Ganitong format:
    
    Interest (50%) + Principal (50%) – broker fee – tax (3%) = total refund.
    Tapos itong broker fee + tax (3%) ay halos kalahati na nung Interest (50%) + Principal (50%)
    
    Pero kung Maceda Law lang ang basis hindi ba dapat yung buong Interest (50%) + Principal (50%) yung refund sa’kin?
    
    Ano po kayang legal option pwede ko gawin para masettle to. Kasi sa tingin ko magmamatigas yung agent kasi sabi niya wala rin daw siya magagawa kasi yun yung bagong policy na pinapaimplement sa kanila.
    - Nimrod Flores
      
      Ah, I see.
      
      The Maceda Law is silent on that one. It does not say kung pwede ba na ideduct ng developer yung mga sinasabi nilang “costs” on their part. But ganyan nga commonly ginagawa nila. So sobrang lumiliit na talaga yung amount na marerefund sa buyer.
      
      On the other hand, you can argue that the law clearly provided that “the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty percent of the total payments made…”
      
      The law didn’t say 50% of the total payments made less the seller’s expenses/costs on the brokers, interests and all those other stuff.
      
      If you’d like to put up a legal fight, you can file a case in HLURB and demand for the entire 50%, not deducted with those costs.
      - Diego Mendoza
        
        Ah ok po sir, will check with HLURB. Thank you very much.
Evelyn muscat

Hi sir nimrod,halimbawa i assume ko ung 1.8milion loan sa bdo..pno ba po?klangan ko bbyaran cash ung utang nila 1.8miliion?kung hulugan ko monthly ay mgkno sa 3taon or less?pwd ba ako mag assume kc may work nman ako d2 australia ?
- lhai robinsonsland
  
  Hi Ms Evelyn, dito na po ata papasok yong sinasabi ni Sir Nimrod na magexecute ng Deed of Sale with Assumption of Mortgage.
  
  Yong monthly niyo po for 3 years at 5.5%p.a. will be approx P54,000
  
  —-
  Btw, you might want to consider instead buying a new condo that will allow you to move-in with only 10% Down payment* and amortize the other 10% for 21 months, then bank loan on the 23rd month. That’s a new program of Robinsons Land that allows you to already use the unit WITHOUT full payment.
  
  If there’s anything you need help with, just contact me. Thanks.
  
  [email protected]
Gabby

Hi Sir! I was the attorney-in-fact of my sis in law who bought a H&L in a subdivision, before moving in, the developer executed a contract to sell and as atty in fact i signed on her behalf the CTS. I short the CTS was already notarized and we already have the copy. My sis in law insisted that she should sign the CTS. According to the developer there is no problem if the SPA sign the Contract to Sell (CTS), since my sis in law designated me as her SPA (atty in fact). My questions are #1. is it still possible to execute another CTS and void the CTS i signed as her atty in fact. #2. Is the contract to sell i signed as her SPA still important if the Deed of sale is executed after paying the mortgaged amount. #3. Is the contract to sell i signed as her SPA still important if she’s going to sell the property while it is still under mortgaged? I want to be clarified so i can explain it to her. Because her laywer boss advised her that CTS is a legal document and she should be the one to sign the CTS. Hoping for your immediate answer. Thank you.
- Nimrod Flores
  
  1. is it still possible to execute another CTS and void the CTS i signed as her atty in fact?
  
  – Yes, but you’ll have to talk to your developer about it. That would mean a lot of admin work in the backend, to change their records. So they might not want to do it. Especially na hindi naman kailangan in your case.
  
  2. Is the contract to sell i signed as her SPA still important if the Deed of sale is executed after paying the mortgaged amount?
  
  – Not anymore. Natapos na kasi talaga yung sale when they executed the Deed of Sale. Yun lang naman purpose ng CTS – to lay down the terms of the purchase while hindi pa pwede i-execute and Deed of Sale.
  
  3. Is the contract to sell i signed as her SPA still important if she’s going to sell the property while it is still under mortgage?
  
  – Not at all.
Sharon Sagaral

Good morning Sir Nimrod. I am planning po sana to sell the unit namin (CTS) state palang pero 1 year installment nalang. ano po ang process sa ganitong pag sell ko ng right? Thank you and more power.
- Nimrod Flores
  
  With most of the major developers, it usually involves only submitting a request to them so they can replace the buyer in your CTS. That is, after nyo maayos ang sale agreement nyo with your buyer.
jojo

Good morning Sir, may ino-offer po kc sa akin na condo unit, the unit was used as a collateral to obtain a loan, since di na po mabayaran yung loan, binebenta po yung condo sa akin, meaning yung balance po ng loan nya ako na yung mag-babayad, pasok po ba ang scenario na ito sa Sale with Assumption of Mortgage?, safe po bang bilhin ang ganitong condo? Pwede po ba yung bank na ang mag-process ng transfer of ownership?
Edgeruizz

Hello Sir Nimrod,
Ask ko lang po sana If tamang mg execute ng deed of sale with assumption of mortgage sa case ko.
Yung tita ko po my nkuhang rent to own na house and lot, before mtpos ung equity binenta nia sakin, ako na po ang tumapos ng equity na hinuhulugan Nya.
since Tapos ko na ung equity next step is move in, before sya i pag ibig financing , kay developer po muna mg bbyad in 2 yrs.
Question 1: Pwede po bang mg execute na si tita ng deed of sale with assumption of mortgage sa case nmin ngayon? kahit hindi pa sya under pagibig. Under pa kase ni developer, Para katunayan na binenta na nia skin At ako na ngbbyad .
Question 2: If mg request ako kay tita ng SPA pwede bang ako na ang mglakad ng mga papers sa pag move in ko, using her documents? Salamat sa sagot.
Jim Flores

Hi Sir Nimrod… Im really praying na sana po ay mabasa nyo ang message ko.. really need your guidance Sir. OFW po ako and isa ako sa mga kumuha ng HL sa carmona cavite… but now we are facing so many problems po sa unit na nakuha namin (madami din plang nagrereklamo hindi lang ako).. paid na po ung aming equity and we are now paying with the bank.. almost or more than 3 years na kaming nagbabayad but until now hindi parin namin inaaccept ung unit kasi wla pring pong nagagawa dun sa mga ni-raised naming complaints… ilang inspection na po ang dumaan pero still the same.. nasasayang ung time and effort and ipon namin sa pabalik-balik sa kanila… if I’m not mistaken more than a year ago ung 1st inspection namin. yeah like year 2015.. so I ended up thinking na mas maigi pa palang lupa nalang ang binili namin kung ganun din lang na kami din pla ang gagastos sa pagpapagawa ng HL na kinuha namin and to take note meron pang renovation cash bond na kailangan and as per my readings, sobrang tagal din makuha after…

my concern now Sir is plano ko po sanang mag withdraw nalang at humanap nalang ng mas maayos na developer or develop na na unit… but not on same developer anymore.. pero worried po ako na wala akong makuha sa mga pinaghirapan ko.. I’m praying Sir na sana po ay may paraan pa para maibalik sakin lahat ng naibayad ko kasi talgang perwisyo lang ginagawa ng nila.. and another perwisyo na naman kung itutuloy ko.. kung mag continue pa ako sa pagbabayad baka lalong mas malaki ang mawawala sakin in time.. Sana po matulungan nyo ako ([email protected])… Maraming maraming salamat po Sir…
- Jho Mariñas
  
  Anung developer nyo po sa carmona?
- EntraVenuS
  
  disqus_ohzveK13in important
- Nimrod Flores
  
  This reply may be very late, but I hope it still helps others who come across this post. For cases like this that the fault is on the part of the developer, you can sue them for violating P.D. 957 and demand for the return of all payments you’ve already made.
  
  For details on this, we’ve published this post: P.D. 957 – Your Protection Against Real Estate Misrepresentations
  - Jemae
    
    Hi sir Nimrod really hoping you can help me on this. Thanks
  - Jemae
    
    end our contract on renting the spa and it has only been 6 months. Im well aware that we need to give a letter of notice to the lessor that we would like to terminate the contract but it was written in the contract that the security deposit will be forfeited. My main concern is would it be possible to use half of the security deposit we made which is equivalent to our rental fee every 3 months? and the 3 months started last December 16. We need to pay on or before March 16. Please advise on this
  - C J
    
    Hi @jimlefleur:disqus,We asked for a refund due to the late turn over by the developer. I was advised that not all of our payments will be refunded like admin costs and reservation fee. Is this valid or can we ask for the whole 100% under PD 957?
Rochelle Tesiorna

Hi sir…ask ko Lang Po..applicable din Po ba ang open deed of sale pag house ang ibebenta?i mean May nagbebenta kc ng bahay samin pero rights palang daw kc 20yrs to pay pa..itutuloy daw namin pagbabayad..if in case matapos namin pagbabayad ung title na nun irerelease samin kung May authorisation ung nagbebenta samin?naisip ko kc kung magpagawa ng SPA expired na un in 20yrs..or pwde ba ung SPA maging valid for 20yrs?in case di I release samin ung title panu namin mapapalipat sa name namin since nasa name ng seller un..pwde ba sya mag issue na now ng open deed of sale na May pirma na nya?kc 20yrs is too long baka patay na sya that time or hindi na namin sya mahagilap panu pa nam
in matransfer sa name namin ung title..I do appreciate your reply..thank you..
Ferny Cuaresma

Hello po Sir … meron po akong condo na nakaloan sa bank but due to financial crisis di ko nabayaran ng 3 months ngayon advised nila for buy back sa developer and sabi ng bank yung naibayad ko na is ma forfeit. ask ko po if ever na ma buy back ng developer ang condo ko yung in house payment ko sa developer is ma forfeit din ba? may habol parin ba ako sa unit ko. kasi around 800k na naibayad ko sa developer and then nilipat sa bank 280k na din naibayad ko dun? thank you po sana maka reply po kayo.
- Samboy_rod
  
  Better buy a buyer who is willing to pay you a certain amount and continue with the mortgage or use Maceda Law,9Which in case you will only receive 50% of your payment).
rose

Hi Sir Nimrod… may inassumed po akong property thru pag-ibig po . Ka officemate ko po yung dating may ari at mga 2 years plang po nya nahuhulugan sa pag ibig. Nasa ibang bansa na po sya at sa akin po nya inoffer at nagkaroon po kami ng Deed of Sale sa halagang aming napagkasunduan. Safe po ba or secured po ang aking pinanghahawakang documents kahit sa kanya pa po naka pangalan pero ako na po ang nagpapatuloy ng kanyang monthly amortization sa pag ibig? Anio po ba ang dpat kong gawin? Salamat po!
- Raider Jpro Fabian
  
  Hi maam/sir ung deed of sale nyo po ba nka fully notarized? Paano po pg ntpos ng byaran ung house.. anglki po ng gain tax nun sa bir?
  - rose
    
    Hello Sir Raider.. follow up ko lang po ang ang kasagutan po sa aking mga katanungan lastweek . Sana po mabigyan nyo ako ng advise . Salamat po.. more power!
Samboy_rod

Plain common sense tells you cannot occupy a property even if you paid the seller since the title is not in the seller’s hand but in the financing institution.
rose

HI sir.. thank you so much po sa inyong reply. Yes po naka notarized at nagbabayad po ako ng kanyang tax. Safe po ba sya sir kahit hindi pa sya skin naka pangalan? or mas ok na iaaply ko sya sa pag-ibig par mailipat skin ang title? Contract to sell po ang aming pinirmahan at napa notarized ko po. Hindi ko lang po maayos ang mga documents kasi nasa ibang bansa na po yung dating may ari at nahihirapan po akong magpirma sa knya ng SPA kasi kelangan po naka blue seal daw po at dadaan po sa consul kung saang bansa nandon ang dating may ari.May iniwan po syang SPA ng kanyang kaptid pero ayaw po i honor ng pag ibig kasi kelangan po ang SPA na format ng pag ibig mismo ang gamitin at kelnagn din po ang pirma ng dating may ari. Sana po matulungan nyo po ako sa kung ano po ang tama.. at kung ok lang po ang pinanghahawakan kong documents na contract to sell lang? Salamat po!
rose

Hello Sir Nimrod, ask ko rin po sana kung yung unit na inassumed ko thru contract to sell na pinagppapatuloy ko po ang monthly ammortization sa pag-ibig pero ang title po ay hindi pa nalilipat sa name ko ay puede ko na ideclared sa aking SALN ang properties?
Eddie Majcic

Good article. Simple explanation. In Australia, this is commonplace. Nothing to be worried about. Obviously, protections need to be in place to ensure the seller pays out or transfers existing mortgage to buyer.
E Ching

Hello Sir. I am selling my townhouse by Assumption. I’m confuse po kasi sa mga dapat na gagawin kapag may buyer na ako. Loaned sa Pag-IBIG ang bahay for 30 years and 6 years na ang nababayaran ko. Naiintidihan ko na ang proseso ng Assume Balance. Ang kailangan is Sale with Assumption of Mortgage (sabi sa taas).

1. May mga iba pa bang kailangang i-process sa Pag-IBIG or kailangang ipaalam sa kanila na pina-pasalo ko na ang bahay?

2. Pag halimbawa may bibili na ng bahay, agad bang ililipat ang titulo sa buyer?

Pwede niyo po ba ako bigyan ng advise and tips kasi ngayon ko lang gagawin itong tinatawag na pasalo or assume balance at magbebenta ng property.. Thank you po, Sir.
Professor Xavier

Good evening po sir Nimrod.
I am into filing a DEED of SALE with ASSUMPTION OF MORTGAGE for my buyer. I have few questions po;

1st, required po ba na inform si bank (mortgagee) about the selling? Wala po ba akong maba-violate?
Ang agreement kase namin ng buyer is to finish na lang the amortization and then transfer the title under their name after the Bank released, para hindi na magiging third party si bank, possible po ba yun?

2nd, Kung sakaling involved naman si Bank and they will be informed about the selling, is it possible na name na ng new owner ang mag-appear sa Title? Kase mahal ang expenses and fees sa transfer processing di po ba?

Medyo doubt po ako kung mababasa nyo pa itong concern ko, kse yung last post na is 4 months, but I’m still hoping na mabasa nyo pa din po.

Thank you and God bless po.
Angelita Rubillos

Good day Sir.Nimrod, decided na po ako ipa assume bahay ko loan from Pag ibig, magkano po kaya pwede ko ask sa buyer?hindi ko na po kasi kayang ituloy and 2yrs npo hindi ko nababayaran kaya nag decide na ako na ipa assume.
thank you po and Regards.
Angie
Gina Magboo

Hi sir Nimrod.
I am owning a house and lot in a subdivision through Pag-Ibig financing. Still have about year to finish my installment payment. The title has already been transferred into my name under the Real Estate Mortgage. BUT I am planning to sell it.
Q 1: Since it has an encumbrance bcos of the Pag-Ibig loan, can I just sell it through the execution of the Contract-to-sell and finalise it with the Deed of Absolute Sale? OR it has to be a sale with the Assumption of Mortgage?
What I am trying to achieve is to simply sell it to the buyer and the buyer will take a Pag-Ibig loan. Pag-Ibig, in turn will pay me from the agreed selling price less my outstanding loan.
Q2: Given my status, must I seek a written approval from Pag-Ibig before I proceed with my sale?
Your advice is very much appreciated.
Tnx.
ryan gimong

hi sir may question lang po ako meron po akong sinalong bahay through pagibig bale 2nd owner na po ako bale ongoing pa po ang hulog dun kasi hindi pa totally bayad ni frist owner yung bahay bale sinalo ko lang po bale mahigit isang taon na po akong nagbabayd ng bahay na to pero sa bill sa kanya pa rin nakapangalan yung bahay pero may hawak akong rights na ako na yung may ari nagpattorney na po kami paano ko po ba ipapapalit sa pangalan ko yung bill or ipapaalm sa pagibig na ako na ang may ari ng bahay…. or pede po ba yun ganung transaction
- Maceda Catherine
  
  Good day tanong ko lang po sa inyo. Anu po nangyari sa sinalo nio bahay. Balak ko din po kasi. Pede na ba yung transaction niyo na deed of sale and notary?
  - Ryan Gimong
    
    ANG PAGKAKAALM KO PO OK NA AYUN AS OF NOW BSTA NASA INYO LAHAT NG PAPERS LAHAT NG ORIGINAL AFTER NYO SALUHIN OK NA YUN BSTA WAG NYO PO WAWALA YUNG DEED OF SALE PERO PAG NATAPOS NYO PO KASI BAYARAN YUNG BAHAY NKA PANGALAN PRIN PO YUN SA SELLER SO ANOTHER PROCESS PO KSI YUNG ILILIPAT NYO PO SA NAME NYO
marichel

hi sir nimrod,
i assume the morrgage of our loaned house in gsis then my parents gave me a deed of sale.. now tapos na po ang mortgage sa gsis, may karapatan po ba ako na kunin ang titulo sa gsis dala lang ang deed of sale? patay na po kc tatay ko at yun mom ko naman matanda na d na kaya bumyahe.. pwede po ba na ako nalang kumuha nun title ng land?
Name

Hello po. Sir, bumili po ako ng lupa tapos ng nag pa transfer of title na kami, nalaman may loan pala sa bangko. Ang problema mo, hindi nakikipag-coordinate ang may-ari para maka gawa ng Deed of Sale with Assumption of Mortgage. Ano po ba sir ang pwedeng gawin ditto? Thank you po
Grapeslyn Calungsod

hello po Sir Nimrod, just asking some information about assumption of mortgage, I assumed a mortgage of house and lot then yong seller is nasa Canada tapos sister niya yong binigyan niya ng authority to sign the documents through (SPA) so ano dapat kong hahawakan na documents galing sa kanila?? thank you po
Rdave

Hi sir nimrod,
Stress na po ako sa situation, ask lang po about selling my HL from pagibig, may buyer na ako lets say binenta ko lamg namg 100k sa kanya then ituloy nalang niya..2 years paid sa fiesta, now nung ipprocess na ni buyer ang pag salo sa loan ko at housing.. ang daming charges at fees hinihingi.. kaya nga nagloloan para makatipid.. pero humihinhi pa si pagibig nang processing fees etc.. mga documents na nakakalito at may capital gains tax pa na humihingi sila nang 6% sa total amount namg bahay.. which is nasa 63k hinihingi ni BIR sa seller at 1.5% sa buyer which is 15k.. bakit po total amount ang kinompute nila e di pa naman bayad ang bahay? Yung pagbenta ko nang 100k e para lugi pa ako kung magbabayad sa dami namg sinisingil ni BIR pati deed of absolute sale daw na 10k sa docs..

Please help.
joymaui

Hi, good day po. hingi lng po sana ng advice. Ung house po kasi na tinitirhan nmin ngaun nkabank financing under sa name ng brother-in-law ko na nasa canada. Bale binenta po nila sa amin ung house with assume balance may deed of sale po un with red ribbon kasi galing pa pong canada, so currently kami po nagba2yad sa banko. Plano ko pong ilipat sa pag-ibig financing pwede po ba un? Ano po ang steps para mailipat ko sa pag-ibig?
356 Bags

Hi Sir Nimrod. Hingi po sana ako ng advice senyo. Urgent lang po sana. I am planning to sell my unit which is mortgaged sa bank for almost 2 years na po. Si Buyer po need to pay Cash po sa mga nabayad ko sa developer at monthly amortization ko sa bank at RPT. Then yung balance po sa bank si Buyer na rin po ang mag assume.

Paano po ba ang proseso nun? Malinis naman po ang record ko. Need ko lang po mabenta kasi nasa Mission na po ako 4 months from now. Thanks!
Edwin

Hi. is it really necessary to register the property in the Registry of Deeds that was already fully paid in Pagibig? Pagibig has already issued me the CTC with my name on it. Every year after that I am paying the property tax. Thanks.
Markho

Good day Sir. Ako po ay isang OFW at planong magbusiness sa realstate. alin po ang mas magandang simula? Flipping, build and sell or property rent to own? alin po ang mas madaling simulan at medyo mababa ang puhunan. at meron po bang bank na pwede magpahiram ng 3M above? of course po meron din akong property na worth 2+M pangkolateral.
Marianne R

Hello po Sir Nimrod…I came across your article since I have an interest in a property being sold by an OFW in Cavite. I read some of the comments on this article, and hope that you can help me figure out how to deal with my situation and the OFW’s. She has paid the downpayment already, and is approved by the bank. She has decided that she wants to sell the property. So I am guessing, her contract is still with the developer and her, and she was told by the developer that if she transfers the property to me, that I would assume the current market value? This is what I want to avoid. My interest in the property is only if I buy the property with the old price. Do you have some words of wisdom to impart? I was told by a real estate agent is that one way to go about it is to continue the bank loan with the OFW’s name since she is already approved, and have a notarized sale of the property on the side. This does not sound right to me. If the scenario is I continue with the mortgage under the OFW’s name, and finish the payment, and then provide the document, wouldn’t that be a bad scenario because it would seem like I bought the property from her (which is in this case, myself), and then she would need to pay taxes on the sale (which in this case, I will also need to pay). Hope you can help out. The developer will obviously advise by protecting their investment and by inflating the price to the current value to protect themselves which makes it difficult for people like Ms. OFW whose situation has changed and needs to get the moneys back due to a hardship.
Any advise would really be appreciated.
lipsofanangel

Hi Sir, Ask lang sana kasi may iaassume kami na house pero naka under pag ibig housing loan. Mag eexecute kami ng deed of sale with assumption of mortgage. Yung name sa title po diba naka under sa original owner pero nasa pag ibig. Pwede po ba yan na i transfer namin ang title under our name pero nasa pag ibig pa rin para ma sure lang namin na kami na talaga ang owner ng house. Kasi kung after ma fully paid na tsaka pa itransfer sa amin ang title what if mamatay po ang original owner? Magbabayad pa kami ng estate tax?
Katherine Kuizon

Hi sir. Meron akong lot na nabili namin for 10500 per sqm. Now nasa mrtgage sa bank. But planning na kami ibenta.
Ngyon ang bentahan sa subd. Na jn is 17k na. How do i sell it?
Compute sqm x 17k then minus kung magkano ng naka mortgage sa bank? Thanks
Rams Caparas Orosco

Hi Mr Nimrod Flores,
Thanks for the article. Tanong ko lang po, sakaling bibili ako ng property na may balanse pa sa bangko (mortgage) yung seller. Hindi po ba pede bank to bank na lang mag bayaran ng mortgage kesa assumption of mortgage. Kunwari ako ang bibili then I will apply sa banko for loan approval to buy a condo unit worth 5Million tapos yung seller ng 5 million condo eh may balanse pa sa bangko for example 3 Million. Hindi ba yung banko na mag approve ng loan ko ang mismong magbabayad dun sa seller covered na pati balanse nya sa mortgage nya sa banko, para siguradong malinis ang title pag ganito o mapalitan ang bangkong naka lien sa title ng property na condo. Tama po ba?

Rams
Aubrey

Hi Sir Nimrod. Meron na pong buyer and property ko na na-loan sa Pag-ibig. However, nasa Cebu po ako currently dahil narelocate ako for work at ang asawa ko lang po ang nasa Manila para asikasuhin ang bentahan ng House&Lot property namin sa Laguna. Sabi po ng buyer, kaylangan po ng SPA ko para ipasa sa Pag-ibig. Pwede ko po ba gamitin yung mga editable forms online at ipanotaryo na lang? Or baka po meron kayong editable form na pwede ko fill-up-an. Napakadami po kasing forms online pero hindi ko po talaga alam kung anu ang dapat nakasulat sa SPA.

To sell with assumption po kasi ang napagkasunduan. Bale mag-loloan daw po si buyer kay Pag-ibig para ibayad sa min in cash, at sila na po ang magtutuloy ng hulog ng 15yrs pa.
Kung meron po kayong editable form, baka pwede pong paki-send na lang sa email ko, [email protected].

Thank you in advance po.
Henry Henry

Hello po, may tanong lng ako regarding sa assumption of mortgage, possible and legal po ba na mag assume ako ng mortgage ng bahay sa Pag ibig kahit na deed of sale lang from the original owner? O need talaga via pag ibig? Thanks po
Joel Manangan

HI Sir, i assumed property loaned at PAGIBIG, unfortunately, the original borrower died and her wife was able to claim the MRI to fully pay the balance. What is the possible way to do, because, the wife is now asking additional payment since the property is now fully paid.. Thank You!
Lorelyn Buhalog

Hi Sir,

Question po. With PagIBig financing, they say that i can no longer change the co borrower to another person. Based on the information you shared, is it possible na si new co borrower ko magkaroon ng selling agreement with my current co borrower na bibilhin nya yung share nya sa payment? Parang assumed balance po but only half. Only the part of the other co borrower
Aya Hersheys

Hi Sir Nimrod.. Ask ko lang po..my right ba si developer sabihin na hindi sila pumapayag ng sale with assumption? Kasi po pinapassume ko yng isang property ko… kaya lang hindi sila pumpayag, dapat daw icancel lang ang contract tapos new contract for the new buyer… which is 50% lang maibabalik sa akin..

Thanks po.
Lyn Silva

Hello,

Good day! Nagplaplan po kami kumuha ng pasalong bahay. Tanong ko lang po kung ano ba ang dapat naming icheck para di kami maiscam. Natatakot po kasi kami na baka pag nakabayad kami ng bahay bigla kaming takbuhan or baka may mangayaring hindi maganda sa seller ng hindi pa naitratransfer samin ung title.

Thanks in advance.
Gremlin Shibboleth

Hi sir Nimrod, need your guidance po…
I sold a mortgaged property with GSIS ten years ago,
We have signed an absolute deed of sale with assumption on obligation (mortgage) without informing GSIS, they paid a downpayment, but until now hindi pa rin nafully paid ang mortgage ko sa GSIS (creditor) at naging triple na po yung loan balance, ano po ang dapat kung gawin, since under my name pa rin po yung loan and yung property, thank you
Angie Alano Legaspi

Hi Sir Nimrod good day! I find this article very informative and helpful. Ask ko nadin po, I am selling my property thru assume balance terns.
Selling price is 5.2M buyer is paying a DP of 2M, ang balance ko nlng po sa bank 2.5M, may difference po na 700k, paano po kaya ung best term pra mabayaran pa ung remaining 700k
Kaycelyn Valenzuela

Hi Nymrod,

What are the legal papers we need to acquire as a buyer, and as a seller to make the sale with assumption of mortgage?
marki Chop

Hello Sir.
I have a question,

I have an interest to buy a property a house and lot.
The current owner a young woman has already paid the equity in full amounting to 650k php.
Her equity was paid off in 12 months instead of the standard 18 months.
So in June 2019 her pagibig was approved but for some reason up untill this point she has not yet started her pagibig payments because according to the owner of the house she claims its the developers issues for some reason of lacking papers and documents from the developer she has not yet started her monthly amoritzation since her pagibig approval from June 2019 up untill this point.

So my wife and I are intertested to buy this propery on assume for 650k and pay the monthly pagibig for 15 years which has been approved.

Is this propery safe to buy? We already had a meeting witht he developer and as per the developer they are lacking some documents from their side.
Rey penuliar

Magandang gabi po Sir, idudulog ko lang po kasi ang kaibigan ko po nabayaran na po nila ang bahay at lupa sa BFS bale sa NHMFC mortgage po talaga nila kinuha ang property tapos ang nangyari tumawag ang BFS sa kanila na nasa kanila na daw pinaubaya ang property na nakuha nila sa NHMFC Mortgage tapos sabi kailangan nilang bilhin sabi ni hindi sila pumayag yun ang tugon nila sa BFS sabi ni pano yung mga nahulog nila sa NHMFC Mortgage ng amortization. Kaya tinanong sila ng BFS kung magkano po ang kanilang gusto halagang bayaran sinabi nila sa BFS pumayag naman ang BFS sa halagang binanggit nila, meron silang dalang deed of sale of assumption mortgage na galing sa dating owner , so ngayon po gusto na nilang ipalipat sa pangalan nila ang titulo sa pangalan nila dahil nasa first owner pa kasi nakapangalan ang titulo nagpunta sila sa BIR para magbayad na po ng kapital gain tax at documentary stamp tax kaso sir hindi po nila inaallow ang deed of sale of assumption mortgage at deed of assignment at marami pa pong documents na kailangan ipakita so nagpunta ulit sila sa BFS sinabi nila sa BFS pero ang sabi ng BFS wala silang mabibigay na absolute of deed of sale dahil meron na kaung kailangan yung hawak daw nilang deed of sale of assumption mortgage yan lang daw at ipakita lang din ang deed of assignment kasi inasign lang sa kanila ang property kaya nga hindi namin ibebenta sa inyo kung wala kaung pinakita sa amin na deed of sale of assumption mortgage kasi galing sa first owner yang hawak nyong deed of sale of assumption mortgage yan lang, hindi kami puedeng magbigay nf absolute of deed of sale dahil iba ang setwasyon ng pagbili nyo ng2 property kahit na sa mortgage nyo kinuha dahil anay karapatan lang magbigay ng karapatan na bilhin nyo ang first owner na binigay nila sa inyo kaya nga may deed of sale of assumption mortgage yan. Ipaliwanag lanh po ninyo sa BIR na ganyan ang setwasyon ng pagkabili nyo sa amin nga ninyo binili pero inahabilin lang sa amin anf property nyo kaya nga po may deed of assignment po kau, ganito po Sir tama po ba ang sinabi ng BFS po kailangan ba namin na ipaliwanag sa BIR pano kunh di parin nila tanggapin po Sir please po kailangan ko lang po talaga ng ganitong kasagutan po