Good Reasons to Assume a Mortgage Loan

If you are thinking about assuming a home loan, it is important to know what that is and how to do so correctly. As a general rule, only FHA, VA and USDA loans can be assumed, and mortgage lender approval is often required for any loans originated since 1989. When is it a good idea to assume a mortgage instead of getting a new loan?

Reduce Closing Costs by Assuming the Loan

When a financial institution makes a new loan, it will often charge a loan origination fee. This can cost a person anywhere from a few hundred dollars to a few thousand dollars depending on the lender and amount of the purchase. Since you are taking over an existing loan, it may not be necessary to pay property or other taxes upfront.

You Could Get a Better Interest Rate

Depending on your credit score, it may be easier to get an affordable interest rate by assuming a loan as opposed to going through the loan application process. Those who are self-employed could also find it easier to get the best rate as well as getting a loan without the need to pay for mortgage insurance. This is because the person assuming the mortgage will also assume the equity in the home, which reduces the odds of default. (Read more on choosing a variety of home loans here.)

Don’t Hesitate to Talk to the Mortgage Company

Consulting with a mortgage company in Las Vegas can make it easier to find out about your loan options. If you are interested in assuming a mortgage, a lender can tell you more about how to do so properly. This can reduce the odds of delays or a purchase falling through entirely because an individual is unable to secure financing to close on the deal.