Does anyone know about assumable mortgages?

I see so many ads on craigslist that say you can take over someones mortgage, save the seller for no money down you just have to bring the mortgage current and they will transfer deed to your name and loan will stay in original owners name. I know there are some assumable mortgages, I’m just not sure this is the right way to do it. Is this a good way to get a deal? Or a great way to get burned?

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5 Comments for “Does anyone know about assumable mortgages?”

  1. jlf

    Assumable mortgages are extremely rare. Beware of anything on Craigslist. A mortgage holder cannot “transfer a deed to your name” without their lender’s concurrence. That lender still has a lien on the property.

  2. knowitall

    If you know there are assumable mortgages, you know more than most people. Those loans went out many hears ago. It is a scam. There area also scammers that rent houses, they show them, take a hefty deposit, then you cannot find them when you get arrested for trespassing.

  3. Landlord

    These are all scams.

    They can not legally transfer the deed without paying off the mortgage. You will give the money, but not own the house. Your rights will be the same as a renter.

    The VA has assumable loans, but the loan itself is transferred to you in addition to the deed, those two documents still remain together.

    You will have to qualify for the VA loan in order to assume it.

  4. Leo F

    that is not a assumable mortgage, that’s called wrapping a mtg and it will set off the due on sale clause in the deed of trust and all balance will be due. Its a scam.

  5. loanmasterone

    These are smart sellers selling their homes. Most of the time when you see this type of ad it is normally an investor that has purchased the property from the owner that was in foreclosure.

    They are using the term assume the existing mortgage, however, many of the mortgages today have a due on sale clause. This simply mean that the mortgage can not be assumed.

    Smart investors circumvent this clause by allowing a buyer of the property to take the property “Subject to The Existing Mortgage.” Investors have no time to go through the time consuming process of getting a mortgage loan, nor do they have cash to place in each investment property they purchase. So this is the method they use.

    You would go through a legal escrow office as well as a title company for the transfer of the property into your name according to the laws of the state in which you reside. The escrow closing officer understand the term “Taking the Property Subject To The Existing Mortgage”

    The escrow closing agent will simply send a request to the lender requesting the amount necessary to bring this mortgage current. The lender will send the information requested to the escrow closing agent.

    Prior to closing you will be required to provide a current hazard (fire) insurance policy, and at the time of closing the county taxes will be prorated and your name is then listed with the county as the owner of the property, thus you will be responsible for the semi-annual payment unless the lender required an impound account where you pay the insurance and taxes through the lender.

    Make sure you check the title policy and understand from your title officer the things that will remain on the title as liens or mortgages prior to assuming the ownership of the property.

    Now of course the mortgage remains in the name of the previous owner.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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