does it mean that i can buy a home and just take over payments on current owners loan? i have bad credit is this a good way to go?
2007-10-24 16:30:39 · 0 answers · asked by cougar26 1 in Business & Finance ➔ Renting & Real Estate
An assumable loan is one that the lender will allow a new buyer of the property to legally assume the mortgage from the seller of the property.
The lender normally charge one point for this transaction.
You also have to qualify under the lender's guide lines. So your credit score and other credit will have a bearing on if you will get the house or not. Some lenders have programs for those with bad credit and others don't. You should allow them to at least run your credit report to get your credit scores.
You also have to earn enough money to pay the monthly mortgage. There is a formula used by the mortgage industry to determine this.
It is not always the best way to go, but one with the least amount of resistance. If you fail to qualify with the existing lender you can always find a mortgage broker to qualify you for a mortgage.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-10-24 17:41:46 · answer #1 · answered by loanmasterone 7 · 0⤊ 0⤋
This means that the buyer who has enough cash to pay the difference between the purchase price and the loan balance can simply take over the loan, with no real need to qualify. VA loans were once all assumable. This is commonly known as "CTM" (cash to mortgage).
Such loans are all but non existent these days. The ones that still exist were written so long ago that the CTM is prohibitively high. As a licensed real estate agent, I have encountered only one assumable so far this year, with a balance of 85K on a home worth 225K, meaning that the buyer would either need 140K to assume the loan, or take a second. Since second mortgages are less secure than first mortgages, they are difficult to arrange and usually come with a higher APR. That higher APR negates the advantage of assuming an existing loan.
Assumables appeal to buyers with credit problems. If they have the cash down, they do not need to qualify for a new loan. Sellers often know this, and feel safe in offering their home at a higher price to attract only buyers who are credit challenged. On occasion, a motivated seller will sell the house cheap to get out of the debt, and the assumable mortgage helps the home sell much faster.
2007-10-24 16:50:52 · answer #2 · answered by zealot144 5 · 3⤊ 0⤋
Assumable Loan Definition
2016-12-28 04:46:00 · answer #3 · answered by ? 3 · 0⤊ 0⤋
here is the definition
"assumable loan"
These loans may be passed on from a seller of a home to the buyer. The buyer "assumes" all outstanding payments.
You will still need a lender to approve you with this type of loan.. you will need to find someone that works with bad credit, heres a glossary of terms so you can look up other mortgage terms...
http://www.derekbeisner.com/glossary.asp
http://www.derekbeisner.com
2007-10-27 17:59:14 · answer #4 · answered by Pure Genius 3 · 0⤊ 0⤋
What Is An Assumable Mortgage
2016-11-09 00:07:08 · answer #5 · answered by ? 4 · 0⤊ 0⤋
For Credit and finance solutions I always recommend this website where you can find all the solutions. http://SMARTFINANCESOLUTIONS.NET/index.html?src=5YAojmqfNU741
RE :What does "Assumable Loan " mean if someone is selling a home?
does it mean that i can buy a home and just take over payments on current owners loan? i have bad credit is this a good way to go?
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2017-03-26 16:24:51 · answer #6 · answered by ? 6 · 0⤊ 0⤋
No, probably won't work if you have bad credit. To take over payments on an assumable loan, you still have to be approved by the lender, and with bad credit that isn't likely. Sorry.
2007-10-24 16:49:38 · answer #7 · answered by Judy 7 · 0⤊ 2⤋
It depends on many things
2016-08-26 04:17:49 · answer #8 · answered by Anonymous · 0⤊ 0⤋
No, you still have to qualify for the mortgage. http://www.choicefinance.net/
2007-10-25 03:18:53 · answer #9 · answered by Anonymous · 0⤊ 0⤋