What are the pros and cons of an assumable mortgage?

Answer 1

Please publish who is giving them!

Grab it! You will be able to sell for a higher amount when the interest rate goes up, and it will be going up after the 2008 election.

Answer 2

Most mortgages have a "due on sale" clause, but if you get the lender's permission, they can agree to let someone assume them.

However, no matter what the mortgage says, you are personally responsible for the note until it is paid.

That means that if you sell the house, and someone assumes the mortgage, and the lender ultimately forecloses, you will be named as a defendant, and be responsible for any shortage when they sell the house.

So, really, there are no pros or cons to an assumable mortgage, if one is wise enough to simply not let anyone assume it.

Answer 3

First, assumable mortgages are extremely rare. I haven't seen one in many years unless they are FHA or VA.

Cons, there really isn't any, other than the fact they are a little more difficult to close because processors and underwriters so rarely encounter these deals, but you get the exact terms up front.

Another Con...your interest rate would have to be extremely competitive in order to be appealing.

Answer 4

You found one? Where? All Pro's if is truly assumable. You take over the existing mortgage and have a second for the balance of what purchase price is, or your offer price.