When assuming a mortgage is the inspection still part of the process or you get it as is?

Question

Are there inspections done to a house when assuming a loan to protect the buyer from a loss in the investment, since assuming is a rare thing. Why would someone just what to let someone else assume a loan?

Answer 1

Even with an assumption, you should still have a purchase agreement. In the Purchase agreement you would specify the terms of the purchase, including if the buyer has the right to have and inspection completed, and if they have the right to back out because of the inspection.

Assumptions are rare, they were more popular back when rates were very high (14-18%) because the existing financing was lower. Most often the buyer would put money down, get a second mortgage (behind the assumed mortgage) or due both.

The only time the buyer would simply assume the loan and not put any additional money into the property would be if the seller did not have much equity, and needed to get out right away.

Answer 2

yes an inspection is required prior to getting a loan from a bank or lender. This is their way of protecting their assets. Have you tried asking the seller why he/she is allowing someone esle to assume the loan? Where is the property located, is the property in falling apart, does the mbr owe back taxes, is the mbr unable to pay the mortgage?

Answer 3

sounds very fishy!!! always protect yourself!!! get a title search done quickly as soon as u signed the purchase agreement.

as a real estate investor i do take mortgages for people (i wouldn't ever EVER ever assume the loan myself personally), but most of the time what they are doing is giving me the house. yes they are givng me the house with whatever debt is included!

so if u assume a mortgage, check the title. what if the guy owes more than the house is worth?? now its in your name and on your credit report.

yes to answer your question inspections are done, but you are on your own to know how to protect yourself. don't assume until everything is checked out!

its like someone handing over the pink slip for their car/boat.... and the credit card they bought it with! now its yours.

Answer 4

if you are the buyer...you'll want to pay for the inspection.
of course it is the most important expense of the closing costs. if youre assuming a loan....or buying new. its a huge investment. peace