David Shippey

Can I Assume a Seller's FHA Loan With Their Low Interest Rate?

Posted By David Shippey @ Jul 19th 2023 9:20am In: Winter Haven News

The answer is Yes. It is possible but there are several points to consider. FHA loans are for primary residences so it cannot be used for investment purposes.

The first task would be to make sure the seller's loan is assumable. The seller's lender decides if you qualify to assume their loan.

A seller will want a release from their lender on the loan so they are no longer tied to the property. If the lender is not willing to give a release, the seller may not be willing to let you assume their loan. If you do not make payments, the seller would be responsible.

Another consideration is the purchase price. For example, if the home is being sold for $300,000 and the assumable loan on the home is $100,000, you must address the difference. You could pay cash for the difference or acquire additional financing for the $200,000. This direction works better if the assumable loan amount is close to the purchase price so you could pay the difference in cash. The lender may not qualify you to assume their loan if you must acquire an additional loan to purchase the home.

Did today's tip spark a question? Think I might be the right Realtor for you? Give me a call and let's talk!

David Shippey - Xcellence Realty
Unforgettable Service | Undeniable Results

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