The advantages of Assumable Mortgages

Today’s advantages of assuming existing mortgages as opposed to applying for a new mortgage

§Lower closing costs

§Lower interest rate loans amortize faster than higher interest loans

§Mortgage is advance in amortization timetable

§Easier to qualify for than new one

§Appraisal Not required

Advantages are there if you are selling a house with an assumable mortgage. With interest rates rising and indications rates might return to earlier ranges (6% to 7%) in the next few years, having a mortgage with below 5% interest could increase the value of your home.

Typically when assuming existing mortgages, the terms remain the same; meaning a buyer five years from now could possibly assume your below 5% mortgage (if qualified) rather than pay the 6% to 7% on a new mortgage. Assumable mortgages could have an influence on what a potential buyer pays. So when rates go up, homes with assumable mortgages may have more value and could sell at higher prices.

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