Assumable mortgages are those where the buyers have a chance to buy the home by taking over the mortgage of the seller of the same. This is a concept that is widely observed across the real estate industry.
An assumable mortgage is a specific kind of financing structure. Here, the property seller has a mortgage which is outstanding. This is transferred with its terms and conditions to the buyer of the property. The buyer can thus avoid the process of obtaining a fresh mortgage. Various loans may be eligible as assumable loans/mortgages, although several considerations do come into play throughout the process. The buyer should also be eligible as per the criteria of the mortgage.
These mortgages are in vogue across the real estate sector, with many people exiting from their properties and costly mortgages. In this case, there are always buyers who wish to avoid applying for fresh mortgages. They pay the balance amount of the property cost to the seller and take on the remaining mortgage which accounts for a fair share of the property value. The remaining amount, tenure, terms and conditions, and rates of interest usually stay the same in these cases. Only the responsibility of the mortgage switches to the property buyer.
