FHA Mortgages - They Are Assumable. How to take advantage?

Question

FHA Loans are assumable, as are most (all?) govt backed loans, I believe.

I've been thinking about this myself. All the 3-4% mortgages out there are assumable. But how to take advantage of that?

Looking for anyone else's input or experience, and might even be interested in teaming up with people.

Thanks everyone.

Sincerely,Frank

Frank Martielli · Answer

Ah, I didn't even think of this part. Anyone know what the actual rule is?

Under this scenario, would the new owner have to occupy for a year?

The way I see it is since we aren't disturbing the original mortgage and just taking it over, if the one year requirement has been met (which is a guarantee under this scenario) why would it have to be met again?

Ryan Muska · Answer

I would assume that is fine. But I am not licensed in CA and cannot provide CA-specific advice on FHA loans, speak with a lender that is licensed there.

Kevin Zhang · Answer

@Ryan Muska. Under assumable FHA loan can i live in there for 1 year and then rent it out as vacation after a year?  Thanks.

Frank Martielli · Answer

Yes, I'm not worried about that I don't think. My thoughts center around the fact that at least part of the overall mortgage would be financed at 4% or less as opposed to all of it being financed at 8%+-

Ryan Muska · Answer

If they are assumable, remember that they will want a larger down payment as the property has most likely appreciated since the original purchase.