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  1. #1
    Tressa Watts
    Guest

    Default Assumable loans...

    Need help...

    My boyfreind and I found a house we really want...I was approved with my income only since he is a full time student at 7.5% interest with $40,000 down as not to pay PMI. (I have a few dings on my credit score I am trying to fix) We found out that the home has an assumable loan and the seller is interested in this also..they are in a fix ...lost job etc and need to get out of high payment. This home has a 5.65% rate.

    Questions...

    Do you think if I have dings on my credit that they will let us assume the loan? Our payments will not be much different then if we put down the $40,000 with the 7.5% interest rate. We will be able to put the $40,000 in the bank until boyfriend is done with school (for a nice buffer) it happens to be with the same bank that our home loan is with now. If we are able to assume the loan we can keep our current property as we have already had 2 people ask if they can rent it...and then sell when the market is a little better...(although our area isnt hit hard) or we wont have to settle for less if we leave on market longer..(will sell better in spring/summer with nice yard and inground swimming pool)

    Any suggestions? I am not sure what to do..I really want this house!!!! advice would be greatly appreciated!

    Thank you,

    Tressa in Washington


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  2. #2
    Monique
    Guest

    Default Assumable loans...

    Are you sure that they are allowing you to simply take over the loan without any cash?

    For example, if the house is selling for $150k, and the mortgage is only $110k, you would still owe them $40.


    On Jan 10, 2008 12:09 PM, Tressa Watts <TressaPSGT@hotmail.com> wrote:








    Need help...

    My boyfreind and I found a house we really want...I was approved with my income only since he is a full time student at 7.5% interest with $40,000 down as not to pay PMI. (I have a few dings on my credit score I am trying to fix) We found out that the home has an assumable loan and the seller is interested in this also..they are in a fix ...lost job etc and need to get out of high payment. This home has a 5.65% rate.

    Questions...

    Do you think if I have dings on my credit that they will let us assume the loan? Our payments will not be much different then if we put down the $40,000 with the 7.5% interest rate. We will be able to put the $40,000 in the bank until boyfriend is done with school (for a nice buffer) it happens to be with the same bank that our home loan is with now. If we are able to assume the loan we can keep our current property as we have already had 2 people ask if they can rent it...and then sell when the market is a little better...(although our area isnt hit hard) or we wont have to settle for less if we leave on market longer..(will sell better in spring/summer with nice yard and inground swimming pool)


    Any suggestions? I am not sure what to do..I really want this house!!!! advice would be greatly appreciated!

    Thank you,

    Tressa in Washington

    <hr>Put your friends on the big screen with Windows Vista&reg; + Windows Live™. <a href="http://www.microsoft.com/windows/shop/specialoffers.mspx?ocid=TXT_TAGLM_CPC_MediaCtr_big screen_012008" target="_blank">
    Start now!</a>


    [/quote]

    --
    Monique




  3. #3
    herberkids3
    Guest

    Default Assumable loans...

    Your best bet would be going directly to the bank and asking. You

    may have to put money towards it, though.



    I'm not sure I fully understand, though. Basically, does it mean you

    would just be taking over an existing loan, and the current owners

    would get nothing out of the deal in order to get out of the loan

    they have?



    I don't see any reason why you wouldn't be able to, simply because

    there's already equity in the home if that's the case. Again, you

    may have to put money down still, though, which isn't a bad idea in

    general.



    --- In Budget101_@yahoogroups.com, Tressa Watts <TressaPSGT@...>

    wrote:

    >

    >

    > Need help...

    > My boyfreind and I found a house we really want...I was approved

    with my income only since he is a full time student at 7.5% interest

    with $40,000 down as not to pay PMI. (I have a few dings on my

    credit score I am trying to fix) We found out that the home has an

    assumable loan and the seller is interested in this also..they are

    in a fix ...lost job etc and need to get out of high payment. This

    home has a 5.65% rate.

    > Questions...

    > Do you think if I have dings on my credit that they will let us

    assume the loan? Our payments will not be much different then if we

    put down the $40,000 with the 7.5% interest rate. We will be able to

    put the $40,000 in the bank until boyfriend is done with school (for

    a nice buffer) it happens to be with the same bank that our home

    loan is with now. If we are able to assume the loan we can keep our

    current property as we have already had 2 people ask if they can

    rent it...and then sell when the market is a little better...

    (although our area isnt hit hard) or we wont have to settle for less

    if we leave on market longer..(will sell better in spring/summer

    with nice yard and inground swimming pool)

    > Any suggestions? I am not sure what to do..I really want this

    house!!!! advice would be greatly appreciated!

    > Thank you,

    > Tressa in Washington

    > __________________________________________________ _______________

    > Put your friends on the big screen with Windows Vista® + Windows

    Live™.

    > http://www.microsoft.com/windows/sho...aloffers.mspx?

    ocid=TXT_TAGLM_CPC_MediaCtr_bigscreen_012008

    >










  4. #4
    Casey
    Guest

    Default Assumable loans...

    Make sure to have a lawyer take a look at the assumption contract. Our first house we bought as assumable, then found out at closing the sellers had put a clause in that stated if we did not get another loan within 12 months that fully released their original loan, we had to pay them a $200/month penalty. Generally, assumables are easy to get into, and the original debtor is still the person the bank goes after if payments aren't made. I had a friend who sold her home and let the buyer assume her loan. Things went great for the first five years, then my friend got a letter from the bank saying no payments had been made and she was responsible. She had to go thru quite an ordeal to come out of that. So I think it's become the "norm" for sellers to put in a clause like ours did. You might have to pay $50-$100 dollars to have a lawyer look things over, but it's so worth the peace of mind. Good luck, I'm
    sure it will all work out for you to get this house. Casey in GA


  5. #5
    Elizabeth Head
    Guest

    Default Assumable loans...

    There are different types of assumable loans. An FHA non-qualifying assumable loan is a type that is no longer offered, but can still be found if a homeowner has not refinanced and is still carrying the original loan of this type. (I know, because I have this type of original mortgage loan). With a non-qualifying assumable loan, the original homeowner must guarantee the loan assumption for a period of 2 years. If the new owner defaults within this timeframe, the original owner has the option of curing the default and retaking possession of the home and can resell it at a later date again. The new owner must be willing to buy out the existing equity of the original homeowner and then assumes the balance of the existing loan at whatever interest rate the original loan was taken out at. The advantage to the new homeownerwho assumes the
    loan is that they do not have to go through the process of qualifying if they have less than perfect credit. The disadvantage is that they need to be able to come up with enough money or another loan source to be able to pay the original owner/noteholder their equity before moving in. If the assumable loan is the newer type that requires income and credit qualification, I don't see much advantage unless the interest rate is lower than the current market interest rate or you can assume the note in a distress circumstance at a very lowdownpayment to equity ratio. Good luck, Tressa!

    Tressa Watts <TressaPSGT@hotmail.com> wrote: Need help...
    My boyfreind and I found a house we really want...I was approved with my income only since he is a full time student at 7.5% interest with $40,000 down as not to pay PMI. (I have a few dings on my credit score I am trying to fix) We found out that the home has an assumable loan and the seller is interested in this also..they are in a fix ...lost job etc and need to get out of high payment. This home has a 5.65% rate.
    Questions...
    Do you think if I have dings on my credit that they will let us assume the loan? Our payments will not be much different then if we put down the $40,000 with the 7.5% interest rate. We will be able to put the $40,000 in the bank until boyfriend is done with school (for a nice buffer) it happens to be with the same bank that our home loan is with now. If we are able
    to assume the loan we can keep our current property as we have already had 2 people ask if they can rent it...and then sell when the market is a little better...(although our area isnt hit hard) or we wont have to settle for less if we leave on market longer..(will sell better in spring/summer with nice yard and inground swimming pool)
    Any suggestions? I am not sure what to do..I really want this house!!!! advice would be greatly appreciated!
    Thank you,
    Tressa in Washington

    Put your friends on the big screen with Windows Vista® + Windows Live™. Start now!


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  6. #6
    Herlean
    Guest

    Default Assumable loans...

    I am not sure of what an assumable loan means exactly. I always thought that lenders run your credit and decide if you can have _______ % rate on the loan. If your credit is not good enough for a 6% or less loan, they may offer you a different rate, or deny you all together. On the other hand, you might get it if you are willing to put some of that $40,000 down. Personally, I would skip the "become a landlord" route myself. I have a full life already. Taking care of TWO homes would be too much work. I already have a family and a full-time career. I would sell it and put the money towards the new home. Herlean

    Tressa Watts <TressaPSGT@hotmail.com> wrote: Need help...
    My boyfreind and I found a house we really want...I was approved with my income only since he is a full time student at 7.5% interest with $40,000 down as not to pay PMI. (I have a few dings on my credit score I am trying to fix) We found out that the home has an assumable loan and the seller is interested in this also..they are in a fix ...lost job etc and need to get out of high payment. This home has a 5.65% rate.
    Questions...
    Do you think if I have dings on my credit that they will let us assume the loan? Our payments will not be much different then if we put down the $40,000 with the 7.5% interest rate. We will be able to put the $40,000 in the bank until boyfriend is done with school (for a nice buffer) it happens to be with the same bank that our home loan is with now. If we are able to assume the loan we can keep our current property as we have already had 2
    people ask if they can rent it...and then sell when the market is a little better...(although our area isnt hit hard) or we wont have to settle for less if we leave on market longer..(will sell better in spring/summer with nice yard and inground swimming pool)
    Any suggestions? I am not sure what to do..I really want this house!!!! advice would be greatly appreciated!
    Thank you,
    Tressa in Washington

    Put your friends on the big screen with Windows Vista® + Windows Live™. Start now!


    &#32;



 

 

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