Assumable Mortgage - Posted by Shenesa

Posted by JPiper on April 08, 2000 at 08:46:47:

There is an answer to this problem.

FHA has a steamline refinance program. Assume the loan, non-qualifying, make the payments on time for 6 months, then refinance using the streamline program. This program is NON-QUALIFYING. It applies to the old FHA loans. This pays the old loan off when the new loan is written. Guess what the owner wants to do now???


Assumable Mortgage - Posted by Shenesa

Posted by Shenesa on April 07, 2000 at 11:48:50:

I called on a house and spoke with the owners today about the property. They want someone to assume the mortgage. They are not looking to get any cash from the deal they just want out due to the fact they are purchasing another home. The house is a two family home (which was converted from a 1)that is in an area that is considered urban(not warzone). It is in excellent condition. They would like someone to take over the mortgage that is $93K. Which for that area is tooooo high. Both floors rent for $530(tooo low) a month, which has not been raised for a few years now. The mortgage payment is $1k a month including PITI, tenants pay own heat. How can I stucture this. I know that one can assume the mortgage by just taking over the payments without a so called credit check being done and all the red tape(100% assumable). Is this correct? Please explain assumable mortgages if I am missing it. I did ask if there was a DOS clause in the contract and the boyfriend did not know right off hand.


Re: Assumable Mortgage - Posted by doug,KY

Posted by doug,KY on April 07, 2000 at 12:51:28:

Is the mortgage from a private party or from an institution? Ask how old the mortgage is? If it’s early than 1987 and if it’s a FHA or VA loan, you can assume with no qualifing. Later than that you’ll have to assume formally on the FHA or use another creative techinque. Ask the seller if you can see a copy of the mortgage and note. If there’s number at the top right corner of the mortgage instrument, chances are it’s a FHA loan. Read through the document. Older conventional mortgages have a clause number 17 (DOS), but not always.

If the owner’s don’t have a copy of the mortgage go to the county clerk office where they record deeds. You should find a copy of the mortgage along with the deed.

Also, you need to check the title to see if it’s clear or not before taking title “subject to”.


Re: Assumable Mortgage - Posted by neil_pa

Posted by neil_pa on April 07, 2000 at 17:48:40:

I just dealt with a couple who had a 1986 assumable loan. They owed too much for me to want to do the deal since the area had become a war zone since the mortgage was initiated. One thing I learned was that while the loan was fully assumable and non qualifying there were two ways to assume it. For around $125 someone could assume it but the old owner would still be on the hook for 5 years. For around $600 to $700 the same loan can be assumed but the old owner will be off the hook altogether. Guess which one the owner wants???

Hope this helps.