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What types of mortgages are assumable? Would getting an assumable mortgage now be financially prudent?

by BHarding from Roseburg, Oregon. May 1st 2013 Reply


William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions

FHA and VA loans are assumable.. For VA, you must have VA benefits available to you, and you must fully qualify to assume another persons loan. FHA loans are assumable with qualifying. There are no non-qualifying assumable loans issued anymore.. and there hasn't been for over 25 years. Currently, I really don't see a benefit to assuming someone else's mortgage. If current interest rates were in the 5% to 6% range, then it would make sense to assume a 3.5% mortgage, assuming you had the cash difference from the sale price to loan balance, but other than that, I really don't see a benefit.. For the person selling a home with an FHA or VA loan on it, there is no benefit to them whatsoever since in certain situations, the original borrower can still maintain some responsibility for the recently sold / assumable loan. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

May 1st 2013
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Carlos Figueira (carlosfigueira)
#107 ranked lender in New Jersey - 199 contributions

FHA and VA loans are assumable, call a Lender411 loan officer in your area to get details on pros and cons.

May 1st 2013
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Helen Wiliams NMLS #262816 (helen@titanfg.com)
#8 ranked lender in Oregon - 5 contributions

FHA loans are assumable. There are advantages and disadvantages of every loan- call me and I will go over them with you.541-868-2660

May 1st 2013
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Charlie Sparks (CharlieSparks)
#8 ranked lender in New Mexico - 401 contributions

Assumability will be an advantage years down the road when you want to sell. Lets say you get a FHA 3.25% 30 year fixed now and 6 years from now rates are 7%. Anyone applying for a loan at that time would have to qualify at the 7% rate, but your lender can qualify them at your 3.25% rate which in theory gives you more potential buyers. If your home goes up in value by 50% in that time there would need to be a large down payment from the buyer unless you wanted to carry most of the equity on a note. There are many variables depending on what rates and home values do. Additionally, FHA mortgage insurance is rather expensive compared to (non-assumable) conventional so you will most likely have a higher payment while you own.

May 1st 2013
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Jerry Potter (JerryPotter)
#78 ranked lender in Washington - 37 contributions

FHA & VA loans are assumable. There are qualifying requirements. I'm licensed in OR and would be happy to assist you.

May 1st 2013
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Dave Metsker (DaveMetsker)
#35 ranked lender in Oregon - 2,318 contributions

FHA is your best bet, unless you are an eligible veteran.

May 1st 2013
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Peter Savino (855411LEND)
#99 ranked lender in New Jersey - 332 contributions

Williams answer is spot on !

May 1st 2013
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James Mazzola (Mazzola)
#109 ranked lender in New Jersey - 314 contributions

FHA and VA loans are assumable

May 2nd 2013
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Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions

FHA loans are the most popular assumable loan, with VA following right behind. Assumable loans should be a great option today. Think about it. Let's assume mortgage interest rates 10-years from now are 8%. How cool would it be to be able to sell your home, allowing the buyer to assume your current 3.5% rate??

May 2nd 2013
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

FHA and VA loans are assumable with requirements.

May 2nd 2013
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Michael Patterson (MichaelPatterson)
#51 ranked lender in Washington - 73 contributions

As many have answered here, VA and FHA loans are assumable, under qualifying conditions. In my experience, qualifying to assume a loan is very similar to a full loan qualification. Unless the interest rate on the assumed loan is substantially lower than local market rates for FHA and VA then assuming a higher interest rate note may not be your best bet. Today's rates are oustanding. When reviewing options, closing costs might be the factor on this as well, but the current market conditions allow for a lot of Yield Spread Premium (aka "Rebate") that is directly applied to your closing costs and can cover a lot of it, depending on the loan amount and market rate conditions. Down payment is low for FHA with 3.5% down payment required, but that can come entirely from a gift from family member or employer. Some local government agencies also offer down payment assistance programs. We have two branch offices on either side of you on I-5 in Milwaukie and Medford. I know the branch managers there so if you would like an introduction please let me know.

May 2nd 2013
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