Financing in Douglasville>Question Details

Vivian Powell, Both Buyer and Seller in Douglasville, GA

With an assumable loan do the party that is assumming the loan have to have a down payment? Please tell me

Asked by Vivian Powell, Douglasville, GA Sun Jan 18, 2009

how an assummable loan works.

Help the community by answering this question:


There are two types of assumable loans, qualifying and non-qualifying. Most today if not all are qualifying where the buying looking to assume the loan has to qualify with the mortgage company to do so. Assumable means that the buyer would be assuming the current loan which includes the balance and the terms of the loan in place. If the owner of the property has a lot of equity then the buyer could have to pay the difference between the balance of the loan and the value of the home to the seller or the seller could hold a second for the amount and the buyer would pay the seller monthly installments to pay off the second just as they would be paying the mortgage company monthly installments to pay off the first mortgage.

The other thing to keep in mind is the rate of the sellers loan. The current rates are so incredible including FHA rates which only requires 3.5% down. If the sellers rate is significantly higher than you might want to consider doing your own loan for the property. You will also want to have a title search performed to ensure you are not inheriting liens... and you will want to make sure what type of loan you are assuming to ensure that your payments are not going to soon increase.

Best of Luck! Douglasville has a lot of foreclosures so choose your new home wisely.
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1 vote Thank Flag Link Sun Jan 18, 2009
Find someone with a va loan and leave the agent out of the picture so you dont have to pay realitor fees. The good thing about assuming a loan is no closing costs and no realitor fees which can total 8-10% of the total loan value.
0 votes Thank Flag Link Wed Apr 15, 2009
As Josh and Lorie mention, the "assumee" typically steps into the prevailing terms of the loan and continues on. Many loans are no longer assumable and the ones that might be will have you qualify. Lori hits a good point, you might as well shop for a new loan as rates have never been this low - and she's right about the Douglasville area - do your homework as many areas out there are in a value spiral.

0 votes Thank Flag Link Mon Jan 19, 2009
Lorie gave you an awesome answer.

The short version is, most often NO. Assumable requires you to qualify, but that rarely includes another down payment. (the first one being the current home owner)
0 votes Thank Flag Link Mon Jan 19, 2009
Joshua Jarvis, Real Estate Pro in Duluth, GA
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