Buying A Home – Understanding Assumable Versus Nonassumable Mortgages
As a real estate investor, you’ll need to deal with a sellers existing mortgage. Therefore, it’s important for you to understand the difference between assumable vs. non assumable mortgages. In an assumable mortgage, the buyer bypasses the step of qualifying with a lender to take over a sellers existing loan. The advantages of purchasing real estate with an assumable mortgage are for two reasons. First, if a buyer has a poor credit, it won’t affect their ability to qualify for a loan. Secondly, the buyer is spared from having to come up with extra costs associated with applying for a new home loan. When a buyer is also an investor, it would be a shame for the buyer to pay these extra loan costs when he or she will turn around and flip the property within the next few months.
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