Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
1y
Never heard of it. Downsides off the top of my my head…
1) You’re going to need larger down payments. Many are going to have 20-40% equity which you’ll need to pay off. Even those who just bought a couple years ago are going to want more than 10% so after closing costs they don’t have to pay to sell.
2) you’re probably going to be charged over market prices. The sellers are going to advertise their low rate as a reason they are charging you over market rates. But that’s basically prepaid interest.
3) you're going to need good credit and and a good DTI, these aren't walk in and assume they're going to be qualify of assume.
4) you’re probably going to limit yourself to less than 1% of the market. What are the odds these are the best deals?
While I wouldn’t turn down an assumable mortgage. I’ve never seen it make sense. We have to much appreciation, causing too much equity and down payments in excess of 35%. Maybe in a stagnant or better yet a depreciating market you could catch an owner scared of losing what little they have left? Assuming you know it won’t continue to fall.
If it’s free maybe you can post a couple deals you buy off it. But I wouldn’t advise you waste too much time on it. It’s something your realtor should be able to search for you for free without wasting your time. Good luck.
Never heard of it. Downsides off the top of my my head…
1) You’re going to need larger down payments. Many are going to have 20-40% equity which you’ll need to pay off. Even those who just bought a couple years ago are going to want more than 10% so after closing costs they don’t have to pay to sell.
2) you’re probably going to be charged over market prices. The sellers are going to advertise their low rate as a reason they are charging you over market rates. But that’s basically prepaid interest.
3) you're going to need good credit and and a good DTI, these aren't walk in and assume they're going to be qualify of assume.
4) you’re probably going to limit yourself to less than 1% of the market. What are the odds these are the best deals?
While I wouldn’t turn down an assumable mortgage. I’ve never seen it make sense. We have to much appreciation, causing too much equity and down payments in excess of 35%. Maybe in a stagnant or better yet a depreciating market you could catch an owner scared of losing what little they have left? Assuming you know it won’t continue to fall.
If it’s free maybe you can post a couple deals you buy off it. But I wouldn’t advise you waste too much time on it. It’s something your realtor should be able to search for you for free without wasting your time. Good luck.
You are absolutely right.
I will definitely have to put a significant down and be overcharged on market value.
I will have my realtor help me find something with more exposure to the market.