Has anyone used Assumable mortage?

Question

Sites like withroam.com present multiple assumable mortgages. What are the pros and cons of doing this? Can these be assumed for investement homes?

Kishore kumar Sayee · Answer

Thanks for your response and raising awareness on what questions to be asked.

- is the loan assumable WITH or WITHOUT the buyer needing to “qualify”?

-->Buyer needing to Qualify- is the loan assumable with the exact same terms or is there an”adjustment” to the interest rate, or other terms?

--> exact terms and same APR

- does the buyer need to have the property as his PRIMARY RESIDENCE, just A PERSONAL residence (second or vacation home) or can he own the property as an investment?

--> Investment

- can the seller carry a second, or an the buyer obtain a second, or will the borrower need to pay all cash “to the mortgage” to be able to assume the loan.

--> All cash to the mortgage

-- does the buyer have to assume the loan in his personal name, or an he assume the loan thru an entity? If he is allowed to purchase thru an entity will he be required to personally guarantee the loan?

--> Buyer name.

- will the lien holder require an actual ASSUMPTION, or will they allow a subject to transaction?

--> Not understanding this qusetion.

- will the seller be released from liability for the debt?

--> Yes.

- will there be fees related to the assumption?

-->Dont know.

-will the buyer be required to purchase a new title insurance policy?

--> Will ask the mortgage company.

- will the lender be charging a “transfer” fee? Who will be responsible for payment, the buyer, the seller, both or either?

--> Not decided.

Don Konipol · Answer

ASSUMABLE could mean many different things- is the loan assumable WITH or WITHOUT the buyer needing to “qualify”?- is the loan assumable with the exact same terms or is there an”adjustment” to the interest rate, or other terms?- does the buyer need to have the property as his PRIMARY RESIDENCE, just A PERSONAL residence (second or vacation home) or can he own the property as an investment? - can the seller carry a second, or an the buyer obtain a second, or will the borrower need to pay all cash “to the mortgage” to be able to assume the loan.- does the buyer have to assume the loan in his personal name, or an he assume the loan thru an entity? If he is allowed to purchase thru an entity will he be required to personally guarantee the loan? - will the lien holder require an actual ASSUMPTION, or will they allow a subject to transaction?- will the seller be released from liability for the debt?

- will there be fees related to the assumption?

-will the buyer be required to purchase a new title insurance policy?

- will the lender be charging a “transfer” fee? Who will be responsible for payment, the buyer, the seller, both or either?

Kishore kumar Sayee · Answer

Thansk for the reply @Joey Banasihan. Can you explain a bit more on teh house hack route? Also how many months usually is the owner-occupied requirement on these assumable loans. Is there a general number that is in practice?

Joey Banasihan · Answer

Hey @Kishore kumar Sayee, Great question — assumable loans definitely open some cool doors, especially with rates where they are now.

One thing worth checking is whether the loan type (FHA, VA, etc.) allows it to be assumed as an investment property, since a lot of them require you to be an owner-occupant upfront. You might still be able to go the house-hack route if that fits your plan.

Curious—have you looked at any of the Roam listings closely? The pros are going to be the possibility of getting a much lower interest rate - you still need to get approved for the loan and if the property has gone up in value since the original purchase, you would need to pay that difference, usually cash.