I know I helped a lot of people get into low interest rate fha loans that are assumable. And finally we are beginning to see a few of these showing up as an option to purchase.
For the last 25 years, most buyers have gotten a new mortgage or paid cash when purchasing a home. For a practical reason, owner-occupant buyers have another alternative: assuming a lower interest rate existing FHA or VA mortgage.
In the late 80’s, both FHA and VA began requiring buyers to qualify to assume their mortgages. Prior to that, good credit or even a job wasn’t required. The real reason there haven’t been significant numbers of assumptions in the past 25 years is that interest rates have been steadily going down. If a person had to qualify, they might as well do it on a new loan and get a lower interest rate.
When interest rates on new mortgages are higher than the rates of assumable FHA and VA mortgages originated in the recent past, it may be more advantageous to assume the existing mortgages.
Conventional loans have due on sale clauses that prevent them from being assumed at the existing rate.
While the equity may be more than the down payment on a new mortgage, second mortgages are available to make up the difference. Contact us to find out if this may be an option for you. Or speak to one of our highly recommended Finance lenders.