Can Someone Take Over My Mortgage in Texas? Your Options

Short answer

Sometimes, but only one path frees you from the loan without a sale. A formal assumption needs your lender to approve the buyer and release you. In a subject-to deal the loan stays in your name and the lender may call it due. Selling and paying the loan off at closing ends it.

Yes, someone can take over your mortgage payments, but that phrase covers three very different deals. In one, your lender approves the buyer and lets you off the loan. In another, the buyer gets your house while the loan stays in your name. In the third, you sell, the loan is paid off at closing, and nobody takes anything over. Which of these you are being offered matters far more than the monthly number.

This guide compares the three at a summary level and points to deeper guides on each. If the house is in Tarrant, Dallas, Collin or Denton County, our DFW version of this guide covers county fraud alerts, tax lookups and local help.

Three things "take over my payments" can mean

Option	Who owns the house after	Whose loan it is after	Lender approval
Formal assumption	Buyer	Buyer; the seller can be released	Required
Subject-to sale	Buyer	Still the seller's	Not part of the deal, which is the risk
Sell and pay off	Buyer	Nobody's; it is paid in full	Not needed; the lender is paid

The rest of this guide takes each row in turn, then covers the warning signs and the questions to settle before you sign anything.

Step one: read your own loan papers

Before you talk terms with anyone, find out what your loan allows. Pull out the Closing Disclosure you received when you took out the loan. The Consumer Financial Protection Bureau's explainer for that form describes a box labeled Assumption. If your loan allows assumptions, a buyer may be allowed to take over the loan on the same terms. If it does not, the buyer will not be allowed to. The CFPB adds that most loans do not allow assumptions.

Next, look in your deed of trust for a due-on-sale clause. Federal law defines it as a loan term that lets the lender, at its option, declare the full balance due if the property or an interest in it is sold or transferred without the lender's prior written consent (12 U.S.C. 1701j-3). If you cannot find your papers, your loan servicer can tell you whether the loan is assumable and what it would need from a buyer.

Option 1: a formal assumption the lender approves

In a formal assumption, the buyer applies to your lender, the lender reviews the buyer, and the buyer signs on to your loan. Government-backed loans have written assumption rules:

FHA loans. HUD's Single Family Housing Policy Handbook 4000.1 says all FHA-insured mortgages are assumable. The handbook also sets out a creditworthiness review of the buyer and a release of the seller's personal liability.
VA loans. VA's notice of borrower rights (VA Form 26-8978) says that for VA loans committed on or after March 1, 1988, you may sell to someone who assumes your loan if the loan holder or VA approves the buyer's credit. If the buyer qualifies and assumes the liability, you are released from it. The same notice warns that your VA entitlement stays tied to the loan until it is paid in full, unless the buyer is a veteran who qualifies to substitute entitlement.
Other loans. Check the Assumption box and the due-on-sale clause, and ask the servicer in writing.

The release is the part that protects you. The Texas resale contract, TREC No. 20-19, lists "release of Seller's loan liability" among the seller's expenses in paragraph 12A(1)(a). TREC's Loan Assumption Addendum, No. 41-3, says that unless the seller is released from liability on an assumed note, a vendor's lien and a deed of trust to secure the assumption will be required. Those documents are there to protect a seller who is still on the hook. Our guide to assumable mortgages in Texas covers the program rules in more depth.

Option 2: a subject-to sale, where the loan stays in your name

In a subject-to deal, you sign a deed to the buyer, and the buyer agrees to make the payments on your existing loan. The lender does not approve the buyer and does not release you. You no longer own the house, but the debt is still yours.

Three points stand out for a seller:

The lender can call the loan. Federal law lets lenders enforce due-on-sale clauses notwithstanding state law. For homes with fewer than five units, the statute protects some transfers, such as one where a spouse or children become an owner, a transfer to a relative after the borrower dies, a transfer under a divorce decree, a lease of three years or less with no purchase option, and certain living trusts. A sale to an unrelated buyer is not on that list.
Texas requires a written warning from the person conveying. Property Code Sec. 5.016 says a person who conveys residential property that will still be encumbered by a recorded lien must give the buyer and each lienholder a separate written disclosure at least seven days before the conveyance or contract. It must list the loan details, the insurance and any taxes due, and say whether the lienholder has consented. Its required warning tells the buyer that the lienholder could demand full payment of the balance immediately.
Your credit carries the buyer's habits. If the buyer stops paying, those are missed payments on your loan. The CFPB warns that missed mortgage payments can hurt your credit score and limit your options.

The deeper rules, including insurance and what happens if the lender acts on the clause, are in our guide to subject-to deals in Texas. Have a Texas real estate attorney review any subject-to offer before you sign.

Wraps and contracts for deed have their own Texas rules

Some take-over offers are built as a wrap mortgage or a contract for deed. Texas regulates both. Finance Code Chapter 159 defines a wrap mortgage loan as one made to buy a home that stays subject to an older, unreleased lien securing someone else's debt. Sec. 159.051 says a person may not make one unless licensed or registered to make residential mortgage loans or exempt, and Sec. 159.101 requires a written disclosure to the wrap borrower at least seven days before the wrap agreement.

A contract for deed, where the seller keeps title until the buyer finishes paying, falls under Property Code Chapter 5, Subchapter D. Among other limits, Sec. 5.085 restricts selling under one while a lien remains on the house. If an offer uses either structure, ask an attorney which rules apply to your facts.

Option 3: sell the house and pay the loan off at closing

The cleanest way to stop owing on a house is to sell it and have the title company pay your lender from the sale proceeds. On the TREC resale contract, releasing existing liens, including any prepayment penalty and the fee to record the release, is a seller expense. Once the payoff is made and the release is recorded, there is no loan in your name tied to that house.

Payoff figures are not hard to get. Under federal Regulation Z, a servicer must send an accurate payoff statement within a reasonable time, and no more than seven business days after a written request from you or someone acting for you. Exceptions include loans in bankruptcy or foreclosure. If you owe more than the house will bring, talk to your servicer and a HUD-approved housing counselor before you list.

Our guide to selling a house to pay off debt explains how liens come out of the sale, and when sellers get paid after closing covers the timing of your proceeds.

Warning signs in a take-over-payments pitch

The CFPB publishes warning signs of foreclosure relief scams. Several can show up when a stranger offers to take over your payments:

Pressure to sign over title to your property, sometimes pitched as a "rent to buy" plan.
Instructions to pay someone other than your lender or servicer.
Advice to stop making your mortgage payments.
Up-front fees, papers you do not understand, and pressure to act right away.

The same CFPB notice says HUD-approved housing counselors help at no cost. A counselor can walk through your options with the servicer before you hand anyone a deed. If you are already behind, read our guide to stopping a foreclosure in Texas.

Where the rules live: 12 U.S.C. 1701j-3 (due-on-sale clauses and protected transfers), Texas Property Code Sec. 5.016 (lien disclosure) and Chapter 5, Subchapter D (contracts for deed), Texas Finance Code Chapter 159 (wrap loans), and TREC forms 20-19 and 41-3.

Questions to settle before you say yes

What does my Closing Disclosure say about assumption, and what does my servicer say in writing?
Will the lender release me from liability, and will I get that release on paper?
If the loan stays in my name, how will I see proof that each payment was made?
Who keeps the hazard insurance and the property taxes current, and how will I check?
Who is preparing the Sec. 5.016 disclosure, and does the deal use a wrap or a contract for deed?
What would I net if I simply sold and paid the loan off instead?

Where your facts matter, ask a Texas real estate attorney, a CPA for tax questions, a HUD-approved housing counselor, or your loan servicer.

Selling for cash and paying off the loan

If you would rather not leave your name on a loan for a house you no longer own, you can sell outright. Cash Home Advisors is based in Fort Worth and buys houses across DFW. We pay all closing costs and can close in 7–14 days. Your loan payoff settles at the title company out of the sale price, and you see the closing statement before you sign.

You can request a cash offer, read how our process works, or browse more financing guides. Facing a deadline with your lender? See selling before a Texas foreclosure.

Want a cash offer instead?

We buy Texas houses as-is, pay all closing costs, and can close in 7–14 days.

Get my cash offer or call (817) 635-0743

Frequently asked questions

Can a family member take over my mortgage in Texas without the lender calling the loan?

Federal law bars lenders from using a due-on-sale clause for certain transfers of homes with fewer than five units, including a transfer where your spouse or children become an owner, a transfer to a relative after the borrower dies, and a transfer to a spouse under a divorce decree. Other transfers depend on your loan contract and the lender.

If someone takes over my payments, am I still responsible for the loan?

Yes, unless the lender releases you. In a formal assumption the lender can release the seller once it approves the buyer. In a subject-to deal there is no release, so the debt stays in your name even though you no longer own the house.

How do I know if my mortgage is assumable?

Look at the Assumption box on the Closing Disclosure from when you got the loan, read the due-on-sale clause in your deed of trust, and ask your servicer. The CFPB notes that most loans do not allow assumptions.

How long does it take to get a payoff amount from my servicer?

Under federal Regulation Z, the servicer must send an accurate payoff statement within a reasonable time and no more than seven business days after a written request. That deadline does not apply in some cases, such as a loan in bankruptcy or foreclosure.

Sources

General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.