Should I Offer an Assumable Mortgage When Selling My St. George Home?

assumable mortgageSellers in St. George are looking for ways to stand out in a competitive market and attract their ideal buyers. Depending on your current mortgage on your home, you may have the opportunity to offer an assumable mortgage to your buyers. If you have heard about assumable mortgages but aren't sure if it's the right option for you, we can help you develop a strategy that works for you goals as you sell your St. George home

Keep reading to learn more about assumable mortgages or contact us any time to talk about selling your house in St. George

What is an assumable mortgage?

An assumable mortgage is a type of home loan that enables a buyer to assume, or take over, the existing mortgage terms from the seller. Essentially, the buyer steps into the seller's shoes, assuming responsibility for the remaining loan balance, interest rate, and other terms specified in the original mortgage agreement.

Can all mortgages be assumed?

Not all mortgages are assumable. In general, government back loans like an FHA, VA, or USDA loan will be assumable but a conventional mortgage likely is not. However, the best way to find out if your mortgage can be assumed is to ask your lender. 

What are the benefits of offering an assumable mortgage?

It's obvious that an assumable mortgage can benefit the buyers by offering better terms than are currently available to them, but there are also quite a few benefits a seller might enjoy if they offer an assumable mortgage.

Broader Pool of Buyers

Offering an assumable mortgage makes the property more appealing to a broader range of potential buyers. This can be especially advantageous in a competitive real estate market like St. George, as it opens the door for buyers who may not qualify for a new mortgage at current interest rates or who prefer the existing terms.

Efficient Timeline

Assumable mortgages can streamline the homebuying process. Since the buyer is taking over an existing mortgage, they can potentially avoid the time-consuming and costly aspects of securing a new loan, such as credit checks, appraisals, and loan origination fees. This efficiency benefits both parties and accelerates the closing process.

Potential Cost Savings

Sellers may also benefit from offering an assumable mortgage by attracting buyers willing to pay a premium for the opportunity to assume a favorable loan. This can potentially lead to a higher sale price for the property.

Are there any risks or drawbacks associated with an assumable mortgage?

As with any decision, it's smart to find out if there are any risks. While assumable mortgages themselves can be a seamless and mutually beneficial process, it is absolutely essential to be aware of all the terms of the mortgage first. 

The presence of a due-on-sale clause in the mortgage agreement can be a potential risk. If triggered, the lender may demand full repayment of the loan upon the sale of the property, regardless of the assumption. You should carefully review their mortgage terms to understand any such clauses and avoid unpleasant surprises.

We know that as market conditions shift, it can be stressful to know if now is a good time to sell and how to attract the ideal buyers. That's why it is so essential to work with a real estate expert who can offer local expertise and years of experience, like us. Ready to learn more about selling your home in St. George? Contact us any time. 

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