If you have never heard about ways you can Assume A VA Loan or any existing mortgage for that matter, then this is definitely the article for you as we are going to take a look at how you can do this and you will see the benefits if this is offered to you. If there is a little known fact when selling your home, especially when mortgage rates are on the rise it is offering someone the ability to assume your mortgage. When a potential buyer goes about assuming your mortgage what they are doing is taking over your mortgage from its current state. This means that if you are 5 years into a 30 year loan, you are going to assume a mortgage that is for 25 years. In that 5 year time span the current borrower paid a lot of money in interest and also put a small dent into the principal of the loan. When you are looking at the amortization of a mortgage at $200,000 and a 4% mortgage rate, for the first 5 years 63-69% of the payment is allocated to just interest which equates to over $35,000 paid in interest and $20,000 against the principal leaving about $180,000 on the loan.
What can be an even better option for you when trying to assume a mortgage is to Assume A VA Loan as we have determined to have some of the best mortgage rates and guidelines around. Just because you want to Assume A VA Loan doesn’t mean you will automatically get it because you want to. The fact of the matter is you are going to have to go through the approval process through 2 of the following ways in order to start the loan assumption:
No matter which way you try to Assume A VA Loan the lender is always going to have to qualify you as if you are a new borrower requesting a new loan. Now depending on who is servicing the loan will also determine how quickly this mortgage can be assumed. If the current servicer does not have the automatic authority to process the assumption of the loan then they are going to have to send it to the VA Regional Loan Center for approval and processing which can take up to a month. However, if the current servicer does have automatic authority there is no delay in the closing of this loan as the VA does not need to give their approval to move forward with the assumption.
Now to go along with the assumption of a VA Loan, the home buyer and current borrower will need to ensure the following conditions are met at the time of the closing. There isn’t much wiggle room with regards to these requirements so everyone must be on the ball from all sides of the transaction or it is not going to take place which can jeopardize the sale of the home.
It cannot be said how truly great VA Loans are and if it is ever possible for you to Assume A VA Loan you will not be disappointed with the outcome what so ever. It is worth noting the VA Guidelines associated with these loans so you can see for yourself if you qualify for a VA Loan and if you would be eligible to Assume A VA Loan.
If you are ever approached with the opportunity to Assume A VA Loan you should jump at that chance immediately and without question. With VA Loans having some of the lowest mortgage rates around there is no wonder why you wouldn’t want to take advantage of this. Add on top of the great loan you are getting is the assumption aspect which allows you to take advantage of the current borrower’s payments they have already made. For the amount of time they have had the loan they have been paying interest and paying down the principal to your benefit. If you’d like additional information on how to Assume A VA Loan please reach out today at 888-900-1020. I look forward to hearing from you soon!