Assumable Mortgages: A Hidden Gem in Real Estate
Introduction:
Assumable mortgages offer a unique opportunity to secure a three percent interest rate, even in today's high-interest rate environment. Surprisingly, these loans may be closer than you think, and you might be sitting on an assumable loan without realizing it.
Key Information:
The first crucial question to ask a seller is whether their current loan is assumable. This simple query can potentially lead to a better price for the buyer, thanks to more favorable interest rate financing compared to current mortgage rates.
Availability:
Most lenders in Canada allow a qualified borrower to assume an existing borrower's mortgage. I can help you find assumable mortgages in your area.
Definition:
An assumable mortgage allows another borrower to take over the loan without altering any terms. The buyer takes over the balance and payments, providing you with cash for the remaining home value.
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Assumable mortgages appeal to both sellers and buyers. Sellers willing to let buyers assume their mortgage may secure a better selling price and tap into a different pool of potential buyers.
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To assume a loan, the buyer must qualify with the lender. If the house price exceeds the remaining mortgage, a down payment equal to the difference is required. In cases of substantial differences, the buyer may need to secure a second mortgage.
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The lender of the original mortgage must approve the assumption before both the buyer and seller can finalize the deal. The new buyer must apply for the assumable loan, meeting the lender's criteria, such as debt-to-income ratio, credit score, and sufficient assets.
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The lender of the original mortgage must approve the assumption before both the buyer and seller can finalize the deal. The new buyer must apply for the assumable loan, meeting the lender's criteria, such as debt-to-income ratio, credit score, and sufficient assets.
Disclaimer:
Verify information independently, as it may not always be entirely accurate. This information is not an invitation to sell and does not disrupt current agency agreements.
Source:
Canadian Mortgage Professionals Inc.
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