I spoke with a good friend of mine recently who was looking into pursuing a home that was offering an assumable mortgage. He explained to me that this was the absolute best way to get into his first home without putting any money down. Just thought I’d make some suggestions on the topic as a result of that conversation.
Assumable mortgages offer an attractive option to anyone who doesn’t have enough money for a down payment on a home. There are some things to keep in mind when looking into the option of assuming a mortgage. One important consideration is the fact that you still must qualify for the mortgage, so all of the traditional factors come into play, income verification, credit check etc (which can still make this a difficult scenario). Also consider the interest rate on the mortgage, right now rates are tantalizingly low, so it may be beneficial to look into a new high ratio mortgage on a new property (depending on when the assumable mortgage was issued there rate may be a point or two higher).
There are alternatives to assumable mortgages with respect to putting zero down like seller financing or “seller take back mortgages”.
Before pursuing any assumable mortgage scenario speak with your licensed mortgage broker to get the details and discover if an assumable is the right option for you.