If I assume a mortgage will I still qualify for the 1st time home buyers credit?
by Mortgage Rates on Sunday, October 17th, 2010 | 5 Comments
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One more important questions. Can you assume the mortgage? Most mortgages aren’t assumable and if title changes hands, the entire loan can be called due. So, first read the morgage you want to assume and talk to the mortgagee (lender).
realtor.sailor
The terms of your financing mean nothing to the first time home buyer credit. What IS important is that you have title and deed transferred to your name. That being said, unless your landlord has a legally assumable mortgage, that most probably will NOT happen. Unless title and deed are transferred according to the terms required under the first time home buyer credit, you are in nothing more than a ‘rent to own’ scenario. You need to investigate carefully what is going to occur under this agreement.
Most mortgages written are not assumable simply by taking them over. If you want to assume an existing mortgage then you must apply through the lending institution for an assumption mortgage loan package. They would accept an mortgage loan application package after which they would approve your assumption documents based on your income and other requirements.
If the financial institution approves your assumption then you would have the same interest rate as well as the same terms.
Since you are assuming the mortgage loan the lender would want you on the title deed, therefore you would need an escrow closing agent and a title company to complete the transaction.
Under these circumstances you would be eligible for the home buyers credit. The other part to you being a able to take advantage of the buyers credit is the landlord can not be a relative of yours. If the seller is a relative of yours you are not eligible for the first time home owners credit.
Investors use another legal method to assume loans without going through the mortgage loan assumption package from the lender. They place in the sales contract that the transaction is “Subject to the existing mortgage.” The escrow closing agent and the title company would understand this term and would take the appropriate action to close this transaction.
I hope this has been of some benefit to you, good luck.
“FIGHT ON”
A home loan, or mortgage, is most simply described as a loan taken out so that you can purchase a home. Here we’ll explain the very basics of home loans so that you can at least have a basic knowledge of mortgages and how they work.To obtain a home loan you will need to be at least 18 years old and have the income required to be able to easily afford the loan payments. While many mortgages are placed on existing homes, you can obtain a home loan based on units, condominiums, new construction or land packages.
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Regardless of what you need, there is most certainly a home loan option to match your case.Home loans are usually taken out for 15 or 30-year terms and your monthly payment will be based on the principal and interest rate. You may also find that some lenders require that your mortgage payment also include property taxes, insurance, etc. The interest rate for fixed rate mortgage loans tends to be higher than that of variable rate mortgage loans.
Hi,
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