Choosing Between Assuming and Refinancing a Mortgage
If the person from whom you bought a house has decided to move out, it may seem like simply assuming the loan is the best way to go. However, it may not be possible to do so. In fact, it may not always be the best decision to make as it could be more advantageous to refinance the mortgage instead. How do you know which decision is best for you?
When to Assume a Mortgage
If you can assume a mortgage, it may be in your best interest to do so when the interest rate is lower than the current prevailing rate. It may also be a good idea if you don’t want to pay closing costs or other fees associated with refinancing a mortgage. However, it is important to note that a lender will want to do a credit check and other due diligence before allowing this to happen.
When It Is Best to Refinance
It may be in your best interest to refinance a loan if you want to lower your monthly payment. This could happen because current interest rates are lower than the rate on your current loan. Furthermore, the loan will be spread out over 30 years compared to however much time is left on the current mortgage. Since you are paying over a greater number of installments, each payment will likely be lower than what you’re paying today.
Your Lender Can Provide More Information
A mortgage company in Las Vegas can give you more information about the process of assuming or refinancing a mortgage. It may be possible to learn more about the fees involved with each option and whether you qualify to do either based on your credit score or other factors.