What is an assumable mortgage?
An assumable mortgage is a loan that can be transferred from the seller to the buyer. The buyer keeps the rate and payment* of the original loan.
Why not just get my own home loan?
The benefit of an assumable mortgage is that the terms of the original mortgage might be better than what’s available now. Interest rates are rising, and the rate of the original mortgage could be significantly lower than the best rate available today. Assuming the original mortgage could save you thousands over the life of the loan!
If market rates are currently at, for example, 6%, but the buyer can assume the existing mortgage at 4%, the buyer saves tens of thousands of dollars over the life of the loan. There could also be fewer closing costs with an assumable mortgage.
What’s the process of assuming a mortgage?
The lender will have to approve the buyer. The buyer may need to get a second loan to bridge the gap between the balance of the first loan and the value of the home, but our home loan specialists are here to help. The interest difference on the first loan could mean a significant cost savings, and our friendly loan specialists are here to make the process as smooth as possible.
How do I take advantage of this?
Make sure to tell your Realtor or real estate professional! This is a huge selling point in today’s rising rate environment. Making sure that your real estate professional informs buyers about this cost savings is the first step!
How does a buyer assume my mortgage loan?
Lakeview Loan Servicing is standing by to help. We’ll work with your buyer to qualify them to take over your loan.
Will it make the transaction more complicated?
The process of assuming a mortgage loan is similar to securing brand new financing. Since we already own your loan, you’re a step ahead! A Lakeview mortgage specialist will do most of the work with your buyer, and you’ll have some paperwork to sign.
Is there any risk to me? I don’t want to be responsible.
No! As a part of the assumption closing process, you’ll receive paperwork that releases you from any liability or responsibility for the original loan. Once the new buyer closes on the transaction, you’ll no longer be associated with the original loan, so you’re completely protected if the new buyer fails to make their payments.