How exactly does Cash To Existing Loan terms work? Can I still use an FHA loan for this?

Asked by Angelm626, West Covina, CA Mon Oct 17, 2011

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Bill Mota’s answer
Bill Mota, Agent, Monrovia, CA
Mon Oct 17, 2011
Cash to a new loan simply means that the seller wants all his proceeds in cash. That can come from a new FHA loan for the buyer plus the 3.5% downpayment from the buyer. This is the normal way sellers sell. It is very rare for sellers to carry the loan or for the buyer to assume the existing loan from the seller.

Bill Mota
626) 233-0190
1 vote
, ,
Mon Oct 17, 2011
I think it's what Bill Mota said. Your new loan will pay of the existing loan and the remainder of the sales price with your down payment.

Happy funding, Rudi
Web Reference:  http://www.umboc.com
0 votes
, ,
Mon Oct 17, 2011
I believe it means there is an assumable loan on the property, such as an FHA loan, and so you could potentially assume the existing loan terms. Assuming a loan means you have to bring in the difference between the purchase price + seller's mortgage balance, which could be more than FHA's standard 3.5% down payment. The appeal would be if the seller had really attractive financing terms on their loan, well below the terms available currently, however since interest rates are extremely low right now (compared to anything in the past 50 years, other than a few weeks ago) it probably wouldn't make sense to do on a home purchase today. Hopefully some real estate agents can chime in, as that is a term I haven't heard of for a long time.
0 votes
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Mon Oct 17, 2011
Angelm626,
Cash to Existing loan terms.
Generally speaking cash is a cash purchase.
Existing loan means take over existing loan, usually with a large down payment and paying the remainder of their loan with their interest rate they had.
Is it possible, that they may sell the property to your FHA loan but keep in mind the property will have to pass an FHA appraisal inspection. Now many think well I will just have the sellers pay for any repairs. Great thought however many sellers don't want to pay for repairs. This means you may not get the property and you will have already paid out around 200 -350 for a home inspection, and another 400- 500 for an appraisal, only to move on to another property. Buying a home is not like buying pretzels in a store and there are many many variables and this is why you should find a local buyers agent to assist you.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomebuying.org
http://www.socalhomebuying.org
California Department of Real Estate Broker License # 01312992
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