If you are a citizen in the United States looking to purchase a new home, you have probably already thought about applying for home loans. Whether you are a veteran of the armed forces or a just another home-buyer, you will need to have a mortgage if, of course, you aren’t paying in cash. As we know, mortgage costs are among the highest of the settlement statement fees that one needs to pay. However, that does not imply that you cannot hope to save on home purchase. Have you ever contemplated ‘assuming’ an old mortgage instead of taking a new one?
If the buyer (you, in this case) assumes a particular mortgage from a seller, it indicates that the mortgage of the seller becomes the mortgage of the buyer. You therefore acquire both the home as well as the mortgage. The mortgage along with its various obligations and terms get passed down to you, and the original seller of the home is freed from any obligations towards it. It should be kept in mind that all loan types aren’t assumable. Every popular conventional loan type are non-assumable and only the FHA, VA and USDA loans can be assumed.
If you are planning your home purchase this year then considering an assumed mortgage would avail you some great benefits. You should get in touch with a lender or a reliable consultant who would be able to guide you with the qualifications and get you a detailed account of the current available rates of VA mortgages. So, get the best deals on home purchases today!
What does mortgage assumption indicate?
The term ‘mortgage assumption’ is comparatively new and is therefore extremely confusing for first time home-buyers. Let us begin by saying that assuming mortgages is a great way of saving money. If you have come to know that the seller of your chosen home has financed his property using either of the VA, FHA or USDA backed mortgages, you can choose to ‘assume’ the amount of home mortgage due to the bank. This way you can have the same home mortgage rate as the seller.If the buyer (you, in this case) assumes a particular mortgage from a seller, it indicates that the mortgage of the seller becomes the mortgage of the buyer. You therefore acquire both the home as well as the mortgage. The mortgage along with its various obligations and terms get passed down to you, and the original seller of the home is freed from any obligations towards it. It should be kept in mind that all loan types aren’t assumable. Every popular conventional loan type are non-assumable and only the FHA, VA and USDA loans can be assumed.
Is mortgage assumption advantageous?
As have been said before, one can save a lot of money through mortgage assumption. However, there are several other reasons why one should give a thought to this option. First, you can get a huge advantage in the form of a lower mortgage rate. For example, if a property owner used a fixed rate financing of 3% to purchase a home in 2013, the person he sells it to, would own the property at same mortgage rate in today’s times. Naturally, it is a much better deal. For every 100 basis points, there would be a considerable reduction. Once a seller’s mortgage is assumed, one gets to save close to $60 against every $100,000 borrowed. Additionally, closing costs would be much less.If you are planning your home purchase this year then considering an assumed mortgage would avail you some great benefits. You should get in touch with a lender or a reliable consultant who would be able to guide you with the qualifications and get you a detailed account of the current available rates of VA mortgages. So, get the best deals on home purchases today!
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