For most sellers, putting their home on the market can feel daunting, especially if you want to sell within a certain period of time. While there are many factors that can impact your home’s performance on the market, the most overlooked factor lies in your current mortgage. We like to refer to an assumable mortgage as a seller's “secret weapon” since these types of mortgages are a powerful selling tool that can streamline the transaction and help you sell your house fast. Here’s everything you need to know:
What Is An Assumable Mortgage
Simply put, an assumable mortgage allows the buyer to assume the entirety of your mortgage. This includes things like the principle, interest rate, repayment terms, and other key details. This may not sound incredibly exciting, but it can be a huge selling point for potential buyers. Since the buyer won’t need to undergo the process of trying to take out a separate loan for their mortgage, many candidates see this as the ideal scenario when shopping for homes.
How Do Assumable Mortgages Work
Ultimately, an assumable mortgage loan can make the entire real estate transaction run much more smoothly. Some of the top benefits of choosing an assumable mortgage include:
Motivated Buyers
Like we’ve mentioned, buyers who know that your home has an assumable mortgage will be more motivated to make an offer. In many cases, buyers could be looking for a home with a mortgage just like yours. This helps you guarantee that your home won’t be on the market for long!
Competitive Listing
With motivated buyers comes more competition, equating to better offers for your home. When you prepare to list your property, featuring your assumable mortgage in the listing is a great way to increase interest in your home and attract the attention of buyers who are happy to make you a full-price offer.
Faster Transactions
Last but certainly not least is the fact that assumable mortgage loans make for a much faster transaction process for all parties involved. Rather than waiting around for approval from another mortgage company, an assumable mortgage eliminates this step in the process completely, taking a substantial amount of stress out of closing on your home.
How To Find Assumable Mortgage Loans
In general, a few types of loans are considered assumable.
Federal Housing Authority (FHA) Loans
These loans are made for first-time home buyers and come with the benefit of a lower down payment, often in exchange for a slightly higher interest rate. You can learn more about the benefits of FHA loans here.
U.S. Department of Agriculture (USDA) Loans
These are specifically reserved for buyers of rural properties, meaning the potential buyer will need to meet a unique set of criteria if they want to obtain a loan for your property.
Veteran’s Affairs (VA) Loans
Finally, VA loans are given to current or retired military members, as well as their spouses. To assume a VA loan, the buyer will also need to meet these standards.
If you fall into any of these categories, there’s a good chance that your home has an assumable mortgage. To learn more about how assumable mortgages work and determine if this is the right choice for your needs, connect with the Pan Florida Real Estate team today.
