Where Can I Find Freely-Assumable Mortgage Loans?

Freely assumable mortgage loans are out there — but only if you know where to look.

There are a number of older loan programs — very much older loan programs — which feature freely assumable mortgage loans — loans for which financial qualifications are not required for replacement borrowers.

The attraction of a freely assumable mortgage is that it can be taken over by any borrower without permission of the lender. The catch is that the original owner remains responsible for the debt. Of course, that’s a catch for a seller and not a replacement borrower.

Freely Assumable Mortgages

Look for FHA loans originated prior to December 15, 1989 for owner-occupant purchasers. With VA mortgages, search for loans made before March 1, 1988.

The value of such older loans today is likely to be just about zero. Why? Because home values have increased enormously and loan balances have been paid down, meaning to assume such financing buyers will need either a lot of cash, a big second lien or both to acquire a house and keep the original loan in place. Realistically, it’s hard to see a case where these loans make any sense today.

For details, please speak with lenders and brokers.

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Posted in: Mortgages

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