Assumable Mortgage Louisville, KY

Assumable Mortgages are a type of financing arrangement in which the outstanding mortgage and its terms can be transferred from the current owner to a buyer. By assuming the previous owner’s remaining debt, the buyer can avoid having to obtain his or her own mortgage. 

Buyers are typically attracted to homes with existing assumable mortgages during times of rising interest rates. This is because they can assume the seller’s mortgage, which was created when interest rates were lower, and use it to finance their purchase. If the home’s purchase price exceeds the mortgage balance by a significant amount, the buyer will either need to provide a sizable down payment or obtain a new mortgage anyway.

 For example, if a buyer is purchasing a home for $250,000, and the seller’s assumable mortgage only has a balance of $110,000, the buyer would need a down payment of $140,000 to cover the difference, or would have to get a separate mortgage to secure the needed funds.


  • An Kentucky assumable mortgage is an arrangement in which an outstanding mortgage and its terms are transferred from the current owner to a buyer. 
  • When interest rates rise, an assumable mortgage is attractive to a buyer who takes on an existing loan with a lower rate. For example if the current home buyer has a 3% rate, and the current market rate is 7%, the seller of the home can have the buyer assume their mortgage in order to qualify for a lower mortgage payment, but if there is a difference in the sales price and the mortgage amount being assumed, the buyer must come up with the difference hence most of the time this is not a viable option for Kentucky Homebuyers looking to assume a mortgage at a lower rate.
  • Kentucky USDA, FHA, and VA loans are assumable when certain criteria are met. 
  • Buyers must still qualify for the mortgage to assume it.
  • Conventional Loans are not assumable.
Assumable Mortgage Louisville, KY

An assumable mortgage is a type of home loan that allows a new buyer to take over the seller's existing mortgage instead of obtaining a new loan. 

Here are the key points about assumable mortgages:


Transfer of responsibility: 

The buyer assumes the remaining balance, interest rate, repayment term, and other conditions of the seller's mortgage.

Potential benefits:


Buyers may get a lower interest rate than current market rates
Lower closing costs compared to a new mortgage
Simplified process in some cases

Restrictions:


Not all mortgages are assumable
Lender approval is usually required

In regards to the assumption of the mortgage on a borrowers current loan on a house.

This sounds good on paper but in reality it never works.

Below I listed the reasons why assuming someone's mortgage does not work.


Only Certain Loans Are Eligible


Only USDA, FHA, and VA loans are eligible for mortgage assumption. Additionally, sellers may have to jump through a few hoops to release themselves of liability from the loan. This situation makes assumable mortgage loans less appealing to sellers if they have traditional offers on the table.

A Large Down Payment Is Required


The biggest obstacle to assuming a mortgage loan is the large down payment. You can obtain a second mortgage if you do not have the cash to cover the seller’s equity, but this situation can complicate things a bit. Depending on how much equity the seller has, it may be easier and more advantageous for you to obtain a traditional mortgage.


Stringent Approval Process



Assuming a mortgage isn’t a walk in the park. Buyers must provide extensive documentation and undergo a lengthy approval process, often taking up to 90-120 days. This can be cumbersome and time-consuming, potentially delaying the home buying process. Most services of current mortgage loans will not do an assumption due to the low rate.


Seller’s Liability



In a simple assumption, the seller remains liable for the outstanding mortgage debt. If the buyer defaults on payments, both parties’ credit scores are affected. This shared risk can strain the relationship between buyer and seller and lead to financial repercussions for both.



Assumptions are permitted, however they are rarely used as 7 CFR 3555.256(b)(2) requires the transferor to remain personally liable for the debt after the acquisition and assumption (among other requirements) Names cannot be removed from the loan without a refinance of the loan.



Questions about assuming someone's mortgage. Contact me below.


Thanks

Joel Lobb Mortgage Loan Officer NMLS 57916
EVO Mortgage
911 Barret Ave, Louisville, KY 40204
Company NMLS ID # 173846

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

https://lnkd.in/eGz9-TbB
fha assumable homes in louisville

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/


NMLS 57916 


The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).


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$10,000 Down Payment assistance from Kentucky Housing



​KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. We offer a special loan program to help with those. Your KHC-approved lender can help you apply.

Regular DAP

  • Purchase price up to $510,939 with Secondary Market​ or Mortgage Revenue Bond (MRB) income limits.
  • Assistance in the form of a loan up to $10,000 in $100 increments.
  • Repayable over a 10-year term at 3.75 percent.
  • Available to all KHC first-mortgage loan recipients.

​​More About Down Payment and Closing Costs

  • No liquid asset review and no limit on borrower reserves.
  • Specific credit underwriting standards may apply to down payment programs.​

​Secondary Market Eligibility

To qualify for a Secondary Market KHC loan, you must meet the following requirements:

  • Meet Secondary Mark​et Income​ Limits for your county.
  • Be a U.S. citizen, other national or qualified alien person
  • Have a minimum credit score of 620.
  • Be a first-time or repeat homebuyer.

Property Eligibility

The home you wish to purchase must meet the following guidelines.

  • Borrower must occupy the home within 60 days of closing and for duration of loan.
  • New or previously occupied detached, single-family home.
  • New or previously occupied condominium, townhouse, or attached unit in a planned unit development.
    • Check with lender for eligible condominiums.
  • New or previously occupied manufactured housing, single or double wide, permanently affixed to the foundation and taxed as real estate
    • ​Must meet loan type's foundation requirements.
  • ​The property purchased must be in Kentucky.​



Conventional Preferred Program
Conventional Preferred Plus 80
FHA
VA







Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/


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How to Qualify For A Kentucky Mortgage Loan




Joel Lobb  Mortgage Loan Officer NMLS 57916

EVO Mortgage
 911 Barret Ave, Louisville, KY 40204
Company NMLS ID # 173846

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #173846
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).

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