ASSUMABLE MORTGAGES: Will help PROPEL prices when rates rise

By
Mortgage and Lending with Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT MLO 10920
ASSUMABLE MORTGAGES

FHA loans are assumable. What does this mean? When you purchase a home using the FHA program OR you refinance your home using the FHA program, when you go to sell your home, you can offer the buyer your mortgage. They can take over the existing mortgage on the property.

Lenders usually require a credit review of the buyer assuming the mortgage and may charge a fee. The lender will supply the new buyer with an assumption package to review and complete for approval. The shortfall from the sale price and the assumable mortgage will need to be made up via the use of cash or a 2nd mortgage, if one can be obtained.

When interest rates rise (and they will!), the homes with the low rates will be able to help raise the prices of homes. Imagine the rates at 6.5% and the seller wants $200,000 for their home. By offering the buyer a rate of 4.25%, over $200/month approximate savings can result. A buyer would be willing to pay MORE for a home if they can realize a savings in the assumable mortgage.

Some adjustable loans are also assumable. It is always wise to check your loan documents when you are ready to sell to see if you have a loan which can be assumed.
Posted by

Ann Sabbagh, President

"The BEST compliment is a client referral: Thank YOUUU!"

Seacoast Mortgage Corporation

401-305-6906 or 508-243-1190

Residential & Commercial Financing

MLO10920

RIAR: teacher for "The Mortgage Course"; "Valuation of Commercial/Investment Real Estate"; "Reading Financial Statements"

 

"When you choose me as your mortgage consultant, you also choose a financial planner who cares about YOUR financial strength."

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Rhode Island Providence County Pawtucket
Groups:
Mortgages
Blogging & SEO
FOR SALE BY OWNER - MARKETING(FSBO)
EXPRESS WITH WORDS AT ACTIVERAIN
Addicted to Active Rain
Tags:
fha
l
203k
refinance
ri mortgage
ri refinance
ma mortgage
ann sabbagh
ri loans
ma loans
ri loan
ri purchase
lending ri
loans ri
mortgage ri

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
266,414
Dan Rosenberger
Harvest Realty - Westfield, IN

The ability to assume an FHA mortgage should be huge factor, even if the buyer can afford a higher down payment.  Down the road it should make the home much easier to sell.  I think buyers should not just look at the down payment and rate.  You have pointed out another important factor to consider.

Sep 09, 2010 03:02 PM #1
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
116,884

Ann Sabbagh

President, Sr. Loan Officer
Ask me a question
*
*
*
*
Spam prevention

Additional Information