i have a FHA loan which is "assumable" if/when i sell. Does the buyer have to pay a down payment?Does "assumable" make it easier?

Asked by Mike, 18504 Fri Feb 11, 2011

to sell?

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Pacita Dimacali’s answer
Pacita Dimac…, Agent, Oakland, CA
Sun Feb 13, 2011
If you have a low interest rate, then having an assumable loan is a real advantage to you as a seller (it's a selling point) and to the buyer (assuming a low rate).

The buyer will have to go through the normal process of qualifying for an FHA loan, and also putting a down payment. As to how much depends on what the FHA minimum will be by the time you sell, or how much the buyer is willing to put down.

Assumable doesn't necessarily make it easier, but it can become an advantage especially if your current rate is significantly less than what the rates are by the time you sell.

Good luck.
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Wilimagima, Home Buyer, Fort Worth, TX
Wed Jul 22, 2015
VA and FHA loans may be assumed provided that the buyer receives credit approval from the mortgage lender. This contingency is not placed upon the lender, who agrees that the loan may be assumed, but rather is a way for the lender to determine if the buyer is credit-worthy. In such cases, the seller will not receive any of the arbitrage profits, but the buyer must pay additional fees to the VA or FHA.

Click here for more information: http://fhamortgageinfo.com/
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Peter Lamand…, Other Pro, Scranton, PA
Fri Feb 11, 2011
The simple answer is ... It depends. The mortgage will be assumable but if the mortgage does not cover te full value of the property then either 2nd mortgage will be needed and that 2nd mortgage presumably will require a downpayment. Alternately the buyer will have to have cash for the difference... Bottom line they will most likely need some funds. As far as if it will be easier or attractive it will depend if the rate on the mortgage is better then the mortgage the buyer may be able to obtain currently. Hope that helps & good luck.
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Corey Buck M…, Agent, Jacksonville, FL
Fri Feb 11, 2011
An assumable mortgage is a great option that has reared it's head again after being dormant for years. The real benefit will be when you do sell because you will have a marketing advantage over other homes. The bank will still require the new Buyer to qualify for the loan, so it is not easier per say. But think about the potential upside if interest rates rise (very likely to happen...soon). If a Buyer is considering two homes, yours with an assumable 5% mortgage or another where they will have to secure new financing at say 7%. Your home is much more marketable due to the cost savings over the remaining life term of the loan. They may need to get a second loan to cover the principal you have built up and that would be done at the higher rate, but even a portion of the loan being lower will definitely be to your benefit.

Hope this gives you some insight to your concerns.
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