I read an ad about just taking over the payment of a home. No credit check or and deposit...just that month rental. Is this real or just another scam?
2006-10-31 02:52:25 · 6 answers · asked by luvladyblue 3 in Business & Finance ➔ Renting & Real Estate
There are such things a assumable loans. Most home mortgage loans do not work this way. You are right to be vary skeptical. Make sure (have a lawyer read any contracts) that you are buying and not renting the real estate.
2006-10-31 02:56:58 · answer #1 · answered by Adoptive Father 6 · 1⤊ 0⤋
You may be taking over a contract for sale which is not the same as buying a house in the conventional manner. If it is a real mortgage, then ask for a copy of the Note and mortgage or Trust Deed.There is nothing wrong with taking over a contract for sale, it is just that you need to know what you are buying. Even in a contract for sale transaction, it would seem that the holder of the contract would have the right to check your credit. I would be leery, too. Most mortgages are assumable. It just costs so much to do most assumptions, and the credit has to be worthy, that it isn't worth it for the buyers. If the credit is good enough for the assumption, then why pay an assumption fee when you can get your own loan? Use the assumption fee to pay a point or so and pay down the interest rate on your own loan.
I think you are being scammed, but you should take the copies and go to the local title insurance company. They will tell you if that person really owns the property, if it is an installment land contract, and help you determine if what they say is supported with the paper work. Also, very important, ask to see the ID of the person who SAYS the house is theirs before you go to the title company. Many people have "bought" a house from a tenant!
2006-10-31 11:08:01 · answer #2 · answered by Realty Shark 4 · 0⤊ 0⤋
There is and was such a thing as Freely Assumable mortgages. About 20+ years ago they were regular and common FHA loans which did not / does not require lender approval or anything; just an agreement between the buyer and seller in the purchase contract. Many of them no longer exist because they have either been sold or refinanced. They are now FHA mortgages that are assumable with lender approval only; which means you go the to qualifying and approval process as if you were applying for the loan by the current mortgagee to ensure that you are able to repay the debt.
With a freely-assumable loan a new borrower can take over the mortgage payments without lender approval or a check of borrower credentials.
With a qualified assumption, the buyer must meet the lender's current qualification criteria to assume the loan. Once cleared by the lender, the original borrower can often obtain a release of liability and not have a responsibility should the lender foreclose.
2006-10-31 12:04:12 · answer #3 · answered by Teetee 2 · 0⤊ 0⤋
It's a scam, usually run by the real estate agent, both on the seller and the buyer. "No Bank Qualifying", "Non-Qualifying Assumption", "No Credit Check", etc. is how the ads will read.
VA and FHA used to offer loans to people and allow them to sell the house to someone, regardless of credit - up until 1988 and 1989. So technically, you could assume someone's 28 year old loan..... They bought in 1988 for about $30,000. Made payments for 28 years, now owe $2,000. Today's value is $100,000. So just give them $98,000 down and take over payments. No credit check!
Since then, buyers must qualify to assume a loan. If you can qualify for a loan, usually that's the best thing to do. Then you can pick out whatever house is in your price range. If you can find a home with little equity, and a really low interest rate that you like, it might be worth qualifying for that loan.
Good luck in your home searching.
2006-10-31 11:31:58 · answer #4 · answered by teran_realtor 7 · 0⤊ 0⤋
I would be very careful about this. Some adjustable rate loans are assumable but most fixed rate loans have a "due on sale" clause that allows the lender to call the loan if the borrower sells the property.
If you do agree to assume a loan, go through the formal procedure to see that your name is on title and that the previous owner's name is removed.
Read everything carefully and inspect the home with a fine tooth comb. Any one who wants out with no equity payout is suspect.
2006-10-31 11:05:18 · answer #5 · answered by mazziatplay 5 · 0⤊ 0⤋
Assumable loans are rare. You still have to qualify for the loan on your own merits.
2006-10-31 20:47:02 · answer #6 · answered by Anonymous · 0⤊ 0⤋