Have you ever been presented with the opportunity to take over an existing mortgage? This can be a great opportunity if the advantage is presented to you. When you are looking at a home to purchase, and that home has a mortgage on it, there is a great possibility that you can assume the existing mortgage. You may not need to qualify as you can simply take over the payments without any out of pocket expenses that are incurred when purchasing a new home.
Assuming an existing mortgage works best when the seller is facing the possibility of foreclosure. You should be aware that there can be different issues that could arise when you are looking to take over a mortgage. One of the worst scenarios is that the amount owed on the home is far more than the market value of the home. When this issue arises, there is a greater possibility that you can make a deal with the owner to make up the past due amounts and to take over the mortgage. In more cases than not it is highly unlikely that this can be done, but anything is possible.
Although it was stated earlier that you may not have to qualify, in some cases you will have to qualify in order to assume an existing mortgage. Government agencies like FHA and VA have been known to allow you to assume an existing mortgage. But, you should know that this can only be done through the agencies if you plan to move into the home immediately. In order to assume a mortgage, your credit should be in excellent condition this case is true especially when the new owner plans to rent the property.
Another thing that can act as a hindrance when trying to takeover an existing mortgage is; in most cases the homeowner who is being foreclosed on may also have many other outstanding debts as well. In this case it is good practice to check and see if there are any tax liens or second mortgages on the home. You may find yourself dealing with lenders rather than the home owners. Also, if the homeowner is in a financial bind they often times will seek the advice or help of credit counseling services. If the owner has decided to go this route in order to help relief their financial mess, you may want to try and go another direction. Many times ,credit counseling services will offer a workout loan type program that will have you dealing with a complete mess.
In the case that you will have to take the steps to qualify in order to take over a mortgage, you will find that the fees are slightly lower than outright purchasing a home from scratch. Although there tend to be no enormous money saving advantages, the advantages are still very cost-effective as compared to starting anew with a mortgage. You can shop around as any smart purchaser would do and find which lender has the best rate and terms available for assuming an existing mortgage. If you find yourself in a position to take over an existing mortgage than you may find yourself a bundle of savings and less hassle.
