I am wanting to pass on my interest rate and sell my home
I have a home I am wanting to sell that has a great interest rate with a conventional loan.
I would like to make this loan assumable so that the interest rate will help it sell fast.
Also curious if I can increase the sell price in exchange for them to get a lower interest rate?
does anyone have experience doing this? Would you be able to point me in the right direction, and teach me about any hurdles I may run into and how to overcome them.
Quote from @Chris Coltrin:
First, talk to your lender or read your documents to see if the loan is assumable.
Second, determine the value of the home. If you have $20,000 in equity, then you can require the buyer to pay you for the equity and then assume the remainder of your mortgage. You may want to sweeten the pot by only charging them for some of the equity (e.g. $10,000 instead of the full $20,000).
#1 All Forums Contributor
- Investor
- Virginia
Quote from @Chris Coltrin:
I have a home I am wanting to sell that has a great interest rate with a conventional loan.
I would like to make this loan assumable so that the interest rate will help it sell fast.
Also curious if I can increase the sell price in exchange for them to get a lower interest rate?
does anyone have experience doing this? Would you be able to point me in the right direction, and teach me about any hurdles I may run into and how to overcome them.
Also realize most loans are not assumable, so you would be selling subject to the mortgage, which means your name still stays on title and if they stop paying you are the one foreclosed on.
#2 Starting Out Contributor
- Specialist
- Mendham, NJ
The first stop is your lender to ask. The answer is likely no. What's the seller temperature in your market? Most areas are seller-friendly now so even if you can't make it assumable, what's the issue with a traditional sale? It certainly would be sweeter with a low rate, but you also want a higher price so you could just get market price instead and call it a day.
Some loans are assumable. One good way to find out is to call the company that your mortgage is through and find out if your loan is assumable and if it is, what terms does the buyer have to satisfy to assume it!
I shot you a PM would love to chat more. I am local to SLC as well
Hey @Chris Coltrin,
this is top of mind for me and I just went through the process with my brother. I learned that 99% of the time you won't be able to assume a loan unless it's immediate family. My brother was able to do so successfully because of the relationship. If you want to sell to a family member you could make a case but it's also a long process.
He ended up buying my primary so my family could move up. Took a long time but we were successful.
Have you explored owner financing? If you're open to less equity, this option would make your home more attractive to buyers depending on your rate. If you're looking to pull all equity out it may not work, but could be an option to explore with a balloon payment and short term.
I'm an investor and agent here in Salt Lake and would be happy to chat if you're interested