All about assumable loans and how they can help both buyers and sellers.
Happy New Year! As we get started with 2023, we're here to keep you informed, so today, we’re discussing the future of the housing market and mortgage loans.
There have been some concerns about the state of the market, so if you’re considering selling your house in the next year, we recommend you consider some benefits you could offer to buyers that would set you apart from the competition. One thing you could think about is offering an assumable loan.
"If you focus on these three adaptations, you’ll find success in 2023."
Do you know what an assumable loan is? Many people don’t understand them, but they can be very beneficial; there are just some important qualifications. For example, let’s say a buyer wants to purchase a $300,000 home, and the seller owes $250,000. That means the buyer would have to pay the difference ($50,000) to assume the loan. Then the buyer can get all of the terms that the seller has, including their current interest rate, which is very appealing in a market with higher rates. Some current homeowners locked in a rate as low as 3%.
There are some stipulations with this, however, and it matters what kind of loan is involved. Fortunately, FHA, USDA, and VA loans are assumable. However, conventional loans aren’t because they’re federally backed.
It’s worthwhile to look into this when you enter the 2023 market. If you have any questions, don’t hesitate to ask! You can call or email us anytime.