ALIENATION: This is also known as Due on Sale clause. Many conventional mortgages have this clause, and it keeps the mortgage from being assumed. This means that, if you have this clause on your mortgage and you get rid of your home, the entire balance of your mortgage will be due on sale.
So, check your loan documents to see if your loan is assumable. This could really be helpful when you decide to sell or sell and the current interest rates are higher than the rates on your mortgage because, the buyer will be able to assume all the obligations under the mortgage including the lower interest rate just if the loan was made to him/her. Although most conventional mortgages are due on sale, FHA and Va mortgages are assumable.
A borrower looking to assume one of these types of mortgages would still have to be approved by a lender or agencies. When the buyer is approved and property is sold, the seller will be releived of the liabilities of that mortgage. There are fees some fees that apply to assuming an FHA or VA mortgages.
If any of you out there is savvy on this topic, or is a mortgage professional, please add your comments because, I think we owe it to ouselves to educate the consumers. Maybe this can be our way of helping to reduce foreclosure the rate.
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For more information about Greenville SC Real Estate, or to browse over 12,000 Greenville SC homes for sale, visit Victor Amadi's real estate website at: www.TheProducerTeam.com or call 864-525-0201.
Victor Amadi is a Greenville SC Realtor, and this information although may pertain to your area, however, it is based on South Carolina real estate. There may be part of this information that was gathered from different sources, and is an effort to educate consumers on Greenville South Carolina real estate. Information and opinions shared on this blog was deemed reliable at the time of this post, but may change in the future without notice.
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Victor,
I enjoyed your posting about assumable mortgages. You are correct that FHA and VA loans are assumable. Borrowers still have to credit qualify , however many of these loans that were taken out in the last five years will have lower than current market rates. I have co-founded a company, HomeAssume.com that caters to these people. We are in the process of working with our web developer to assist real estate agents to list their properties for sale that have assumable mortgages on our website: www.homeassume.com. It will be another way that professionals, like yourself, can help their clients market their properties. Great blog and I enjoyed your other posting about being a professional and dressing like one.