Are Assumable Mortgages as Great as They Sound?
Complaining about the cost of one’s home mortgage payment has been a popular humblebrag since the days of white picket fences, decades before the term “humblebrag” existed. Today, you cringe, according to the 20th century meaning of the word “cringe,” when you think about your housewarming party humblebrags of a decade ago, when you locked in a mortgage rate that you would not be able to get today unless you placed a down payment for 75 percent of the value of your house. The only way to get an interest rate that low these days is to travel backward in time. Inventing a time travel machine might even be easier than finding an affordable mortgage. Assumable mortgages are the next best thing, but as with so many other financial transactions, it is easier to get desirable things at affordable prices if you are already rich. For help buying or selling a house affordably by transferring an affordable mortgage, contact a Bronx real estate attorney.
At Their Best, Assumable Mortgages Are a Time Machine Ride to the Days of Low Interest Rates
An assumable mortgage transaction is when you buy a house and, instead of applying for a new mortgage loan from the bank to finance the difference between the sale price of the house and the down payment you paid, you simply assume responsibility for the outstanding balance on the previous owner’s mortgage loan. In order to do that, you must pay the seller an amount equal to the value of the seller’s equity in the home. If the seller took out the mortgage when mortgage rates were lower than anything you can find today, such as in 2021, you are getting an unbeatable deal on your monthly mortgage payment.
Unfortunately, not all mortgage loans are assumable, only those issued by the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or United States Department of Agriculture (USDA). Approximately a quarter of active mortgages are assumable.
“Affordable” Is a Relative Term
The low monthly mortgage payment is the good news, but getting to it is not easy. VA mortgages are especially complicated to transfer as assumable mortgages. If you can find someone with a qualifying mortgage who is willing to sell, you must put together enough money to pay them for their home equity. Furthermore, closing a deal on an assumable mortgage takes at least as long as getting approved for a new mortgage loan. It is easier to finalize the deal if you work with a real estate lawyer instead of with real estate agents. This way, you take real estate agent commissions out of the mix, and everyone has the shared goal of finalizing the deal.
Schedule a Confidential Consultation With a Bronx Real Estate Attorney
A real estate lawyer can help you buy a house with an assumable mortgage or enable a buyer to assume responsibility for your current mortgage. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
finance.yahoo.com/news/want-buy-sell-home-3-090731680.html
