When listing your house for sale, the real estate agents at Preferred Residential try to think of every little thing that sets your home apart from all the others on the market. Is there outdoor living space with a fire pit and gas plumbed to the BBQ? Does it have a tankless water heater? Is the garage big enough to actually get two cars inside? …AND still have room for storage? Is your mortgage assumable?
Wait…What? You didn’t think there was such a thing as an assumable mortgage any more? There is but many real estate agents don’t even think to use it as a marketing feature because most mortgages today have a due-on-sale clause that prevents them from being assumed. Currently both VA and FHA mortgages can be assumed as long as the buyer qualifies under the lender’s guidelines.
The goal with marketing real estate is obviously to get someone to buy it but they have to come look at it first. Being able to tell prospective buyers that the mortgage is assumable provides a nearly irresistible hook to get them to come look at your home.
Home buyers love the idea of an assumable mortgage. They also love the real world benefits like potentially getting a lower interest rate than what the market is offering. Other benefits of assumable loans include lower closing costs, shorter amortization periods (depending on how long you’ve had the loan), and in most cases an appraisal is not required. Those are some pretty compelling reasons for a buyer to consider your home over your neighbor’s but it isn’t just the buyer who can benefit.
There is a monetary benefit to the seller that comes from sharing the financial benefits the buyers may realize by assuming the mortgage. That can be in the form of a higher selling price, payments over time, or having the buyer pay seller’s closing costs. The real benefit though, is more attention from prospective buyers and that extra attention should result in a shorter wait for an offer.
With mortgage interest rates projected to continue to rise for the foreseeable future, assumable mortgages will be very attractive to buyers and a Realtor® who understands how to market FHA or VA assumable mortgages should be very important to sellers.
*A few notes: VA home loans can be assumed by anyone not just veterans. Sellers should make sure they get something in writing from their lender stating they have been released from liability for the mortgage. For more information see: How to qualify for a FHA assumable loan and VA assumptions are for more than just veterans