Which document is essential for a borrower intending to assume a mortgage on a property?

The assumption agreement is crucial for a borrower intending to assume a mortgage on a property because it formally outlines the terms under which the borrower agrees to take over the existing mortgage from the seller. This document is essential as it establishes the legal obligations of the buyer to uphold the mortgage terms and shifts the responsibility for the loan from the original borrower to the new one. By signing the assumption agreement, the new borrower acknowledges that they will be responsible for the remaining debt on the property, thus allowing them to benefit from potentially favorable loan terms.

The warranty deed primarily serves to transfer ownership of the property itself but does not address the mortgage obligations. The transfer of title relates to the legal ownership of the property and again does not involve the specifics of the mortgage. The mortgage application is a document the borrower submits to request a loan but is not relevant to the assumption process of an existing mortgage, where the focus is on the agreement to take over the mortgage responsibilities rather than applying for a new loan.