A typical assumption in real estate is where a buyer assumes a seller's loan at the time of sale, often at a lower interest rate than the current prevailing rates. Some loans have assumptions as an option and some do not.
For Buyers:
Benefit to Buyer
Purchase $ or Financed Gap Coverage Needed for Buyers
Risk to Buyer
For Sellers:
Main Risk to Seller
Risk to VA Sellers
Benefit to Seller
Types of Loans for Assumptions:
Government Loan Types w/ Assumable Clauses: VA, FHA, USDA
Most (But Not All) Conventional Loans Aren't Assumable
USDA Assumptions (Typically Current Rates, but Lower Closing Costs)
Other Elements of Assumptions:
They Take Longer
Closing Costs Involved
Not All Lenders Do Them (Disputed)
Alternatives to Assumptions
(Hampton Roads) REIN Assumption Addendum
Getting Help on an Assumption
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