Financing in 94015>Question Details

christinasno…, Home Owner in Temple Hills, MD

FHA Coborrower Buyout?

Asked by christinasnowden, Temple Hills, MD Mon Jul 9, 2012

I have a FHA loan and co-own the property with a friend. The preference for both parties is that one friend will buy the other out. However based on our research i appears that the value of the property is currently less than the mortgaged amount. What are our options? Is there any literature/websites that I can read about this topic?

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Claudia Muller Gravelle’s answer
FHA loans are fullly assumable.
Call your current mortgage servicer and ask them to send you an assumption package for the loan.
You will need to be occupying the property.
An appraisal may not be necessary through this transaction as the lender already has the property now the borrower needs to qualify.
0 votes Thank Flag Link Tue Jul 10, 2012
Well in the absence of equity, there is no cost in buying out your friend, if he/she wants out, you owe them no money. In fact if it is upside down and your friend wants out, your friend owes you money as there is a negative equity.
The assumption idea may be workable because you will not have any closing costs. The thing is interest rates are real low and you have qualify anyway on an assumption , a refinance may be a better option. the only way to tell is to do the math and see which option is in your best interest. Feel free to contact me and go over the numbers there is no cost or obligation. But hurry the FHA insurance costs are going up April 1st.
0 votes Thank Flag Link Tue Mar 19, 2013
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