With about 70% of mortgages currently going through FHA, what will happen in a couple of years (or even now) for mortgage lenders when it's time to sell these homes?  Realtors-listen up, if you are doing your homework, this is an opportunity to make your listings stand out for you!

Here's a thought for Realtors and sellers (and for buyers to look for).......When you have an FHA loan, it is ASSUMABLE.  Countrywide, for example, charges a $525 processing fee and you have to qualify to assume this existing FHA loan (deed transfer charges as well but that's about it).  Here's some advantages:

• You take over the loan where it is meaning if it's a 2 year old mortgage (on a 30 year mortgage), you only pay for 28 years!-there's some value for the seller in the negotiations!
• The current interest rate is ASSUMED-this is good no matter what the market is doing....... Now, if the rate is higher than market and you want to lower it, you can do an IRRL (streamlined refinance).  This is done with no appraisal, no job or income verification, no assets, no credit being pulled! (no kidding!)-just need past 12 months of clean mortgage history!
• If current market rates are higher than the note rate, then the interest rate has additional value to the buyer for negotiations! (if curent rates are at 7% and you have a 5% mortgage, that has a lot of value to the buyer-they are getting a loan rate at lower than the current market)
• There is NO down payment requirement
• The closing costs are minimal (processing fee and title transfer-these charges will vary by lender and state/county)
• You have a lot more flexibility in the negotiations (no closing costs or down payment to worry about in most cases).
• The only thing you really have to work out is the sales price-are you setting it above current mortgage amount and, if not, how will the Realtor get paid (from the seller or buyer)-and if there's equity the buyer will have to come in with the difference to even everything out but in this market.............

***Homeowners, thinking about selling in the next year or two?  maybe you should look into refinancing with a 95% cash out FHA mortgage now.  Pull 95% of the equity out, have a good interest rate (I recommend a low cost closing cost option for this), be able to market it as an assumable-again, low closing costs, no down payment, etc.......

Realtors, take note of this concept.........If there are 10 town homes on a block all pretty similar but one has an FHA assumable mortgage offered that requires no down payment and very low closing costs........which one of these properties will stand out to today's buyers?  You can also sell this house for more money because of the assumption flexibility.

BTW, Guidelines have changed so much not that, if a buyer won't be able to qualify for an FHA assumption, you might be wasting your time with them anyway.......

I'll be honest, as a mortgage person, this stinks for us because, if someone is educated on this concept, with 70% of current loans going to FHA, we will lose a lot of purchase mortgage opportunity in the very near future......(or we should anyway-if htis concept is utilized)

Seriously, think about this........this is an advantage that sellers will have in the marketplace-as well as your buyers!....and this is to your advantage as well! We all know (especially in a flooded buyers market)  you need something that will make your listing stand out........Well, here it is! (I would even ask to see the sellers loan papers when you are listing a home just to verify whether or not they do have an FHA loan....some may not even remember or realize they have one)

Good luck and hang in there everyone, the market has some great buying opportunities!

(BTW, this also applies for VA loans-but FHA is so much more widely used in most areas.....)

 Oh....if your clients have any questions about this or anything else, I'd be more than happy to assist them and answer any questions they (or you) might have.