Hi Everyone,
I often see properties for sale where seller is offering/suggesting that the buyer assume their mortgage. seller does NOT require them to, just as an option.
However, in many cases the principle of the seller`s mortgage is much lower than the mortgage amount required.
Example:
Property price: 500K
Seller holds a mortgage at 250K that the buyer can assume.
Buyer has only 100K to put down his own money
Therefore, additional funds required to purchase: 150K
In the above example, what are usually the BUYER`s REAL OPTIONS to close the deal:
(a) assume the seller`s mortgage and look for a 2nd mortgage
OR
(b) not assume seller`s mortgage and just look for another "regular" mortgage - say 80% of purchase price (400K) and put 100K down or ask seller for a VTB.
How can the buyer accept the seller`s offer (a) to assume his mortgage if no bank will provide the additional 150K required AND allow a 2nd mortgage - the one at 250K from the seller?
In other words, is it correct that assuming a seller`s mortgage is usually possible when buyer has enough funds to pay the rest without taking another mortgage?
THANKS.
I often see properties for sale where seller is offering/suggesting that the buyer assume their mortgage. seller does NOT require them to, just as an option.
However, in many cases the principle of the seller`s mortgage is much lower than the mortgage amount required.
Example:
Property price: 500K
Seller holds a mortgage at 250K that the buyer can assume.
Buyer has only 100K to put down his own money
Therefore, additional funds required to purchase: 150K
In the above example, what are usually the BUYER`s REAL OPTIONS to close the deal:
(a) assume the seller`s mortgage and look for a 2nd mortgage
OR
(b) not assume seller`s mortgage and just look for another "regular" mortgage - say 80% of purchase price (400K) and put 100K down or ask seller for a VTB.
How can the buyer accept the seller`s offer (a) to assume his mortgage if no bank will provide the additional 150K required AND allow a 2nd mortgage - the one at 250K from the seller?
In other words, is it correct that assuming a seller`s mortgage is usually possible when buyer has enough funds to pay the rest without taking another mortgage?
THANKS.