Assumable Mortgages

Assumable Mortgages

Has any done assumable mortgages? It's a type of financing arrangement in which the outstanding mortgage and its terms can be transfered from the current owner to a buyer. By assuming the previous owner's remaining debt, the buyer can avoid having to obtain his or her own mortgage.

Buyers are typically attracted to homes with existing assumable mortgages during times of rising interest rates. This is because they can assume the seller's mortgage, which was created when interest rates were lower, and use it to finance their purchase.

However, if the home's purchase price exceeds the mortgage balance by a significant amount, the buyer will either need to provide a sizable down payment or obtain a new mortgage anyway. For example, if a buyer is purchasing a home for $250,000, and the seller's assumable mortgage only has a balance of $110,000, the buyer would need a down payment of $140,000 to cover the difference, or would have to get a separate mortgage to secure the needed funds


"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote

There are ways around it...

Some owners will carry the financing at the sale price so as to be the first creditor in line in case the buyer has problem making payments.

Secondly, one could assume the loan while getting a 2nd mortgage / HELOC on the equity to pay the balance.

I've never done this. Owner carry would seem like the only situation right now that would be viable, as interest rates are at all time lows.

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