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FHA Loan Assumption: What You Need to Know

October 2, 2021
5 min Read
Assumable unlocks your financial future | FHA Assumable Mortgages

Millions of Homes Have FHA Assumable Mortgages Below 4.5%!

FHA loans are often times the first way homebuyers purchase their home. There is a unique opportunity with the millions of assumable qualified mortgages out there - many historically low rates below 4.5%! The challenge has always been finding homes with these FHA assumable mortgages and completing the assumption process. Thanks to Assumable, it's finally possible to find homes with FHA Assumable Mortgages and complete your sale or purchase. Here's what you need to know about FHA loan assumption.

What is FHA Loan Assumption

FHA loan assumption, as the name suggests, allows a qualified buyer to assume responsibility for the existing FHA loan of the seller. This means that the buyer takes over the loan terms, including the interest rate, remaining balance, and repayment schedule. With mortgage rates surpassing 22 year highs, and no sign of stopping - Assumable Mortgages present an incredible opportunity for people to purchase a home and save thousands of dollars a month in payments and hundreds of thousands of dollars in interest over the life of the loan.

Here's Everything You Need to Know About Assumable FHA Mortgage Loans

1. Finding a home with an FHA Assumable Loan Used to Be Hard, Until Now: Hunting for homes with an assumable mortgage is hard. There is no single resource or place to go to find them, until now. With Assumable you can easily find qualifying homes with assumable mortgages and complete your purchase with a proven process and with the help of top assumable experts.

2. FHA Assumable Mortgages Let You Purchase Your Home With Historically Low Rates: The Assumable mortgage process makes the most sense in today's environment with rising rates and higher cost of ownership. Millions of Americans are sitting on the sidelines with the means to purchase a home, but reluctant to buy due to the sky high interest rates, now over 8%. Assumable FHA loans allow you to assume the existing mortgage of the property, which means you maintain the historically low rates from years past. In some cases as low as 2.3%!

3. Closing Costs: Similar to other assumable mortgages, FHA loan assumption typically involves fewer closing costs since it avoids the traditional underwriting process. This can make homeownership more affordable from the start.

4. Easier Qualification: Buyers who may not meet the stringent requirements of traditional lenders can find it easier to qualify for an FHA assumable loan. This opens up homeownership opportunities for a wider range of individuals.

5. Protecting the Original Interest Rate: For sellers, FHA loan assumption can be a valuable tool for preserving the original low-interest rate they secured when they first purchased the home. This can make their property more attractive to potential buyers and allow them to fetch top dollar for their property.

6. Government-Backed Security: FHA loans are backed by the Federal Housing Administration, providing an added layer of assurance for both buyers and sellers.

Steps to Assume an FHA Loan

To take advantage of an FHA assumable loan, you should follow these essential steps. Use Assumable to help guide you through the process and work with trusted experts

  1. Check Eligibility: Confirm your VA loan eligibility with the lender or mortgage servicer.
  2. Find a Home: Use Assumable to find an eligible home for sale.
  3. Negotiate Terms: Work with the seller to agree on the terms of the loan assumption, including the purchase price and any additional negotiations.
  4. Lender Approval: The lender will assess your creditworthiness and approve the assumption. They may require you to meet certain financial criteria.
  5. Complete the Transaction: Close the deal, assuming the VA loan and becoming the new homeowner.

The Assumable Mortgage process can be daunting, but Assumable is here to simplify and empower your assumable mortgage experience. Start your search now

If you're a veteran interested in exploring FHA assumable loans or if you're considering selling your home with an FHA loan, Assumable is here to assist you. Our platform connects you with expert guidance and a wide selection of homes with FHA assumable loans, making your real estate journey smoother and more affordable. Start exploring your options with Assumable today and unlock the benefits of FHA assumable mortgages.

Ryan Carrillo
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