11/30/2023
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📈 High interest rates keeping you from purchasing a home?
Then let’s talk about one option you might have that you’ve likely never heard of…
Loan Assumption!
💡 How it works:
When you assume a mortgage, the current borrower signs the balance of their loan over to you, and you become responsible for the remaining payments. That means the mortgage will have the same terms the previous homeowner had, including the same interest rate and monthly payments. Mortgage assumption allows a buyer to take on the original loan balance at the original terms. It doesn’t account for home equity the seller has built. If the house has gained value since the original loan, the loan may no longer cover the home’s actual value and the buyer will have to make up the difference.
For example, if the seller has a $300,00 loan balance on a home they purchased for $500,000, the buyer will need to bring $200,000 to the table to compensate the seller for the equity they’ve built.
FAQ’s
🏛️Are FHA Loans Assumable?
Most government-backed loans, including all FHA loans, are generally assumable, as long as the lender approves the sale
🇺🇸 Are VA Loans Assumable?
All VA loans are assumable, but with additional rules and requirements that govern exactly how.
🏦Are Conventional Loans Assumable? Conventional loans are rarely assumable, because the mortgage contract usually contains a due-on-sale clause, which allows the lender to demand the entire remaining loan amount as soon as the property is sold.
🕵🏻 How can I find Assumable Loans?
That’s where we come in! This is more of an art than science, so you’ll want an experienced agent who knows how to navigate the process!
📱 Looking to make a move? Keep us in mind as we’d love to help you find your happily ever after!