It's time to acknowledge that a return to 3% mortgage rates may be unrealistic. If homeowners are forced to sell, we will likely see a drop in home prices, leading to lower property valuations. I know I'm not the only one who shares this outlook.
If you're in the market, now is the time to buy. Home prices are unlikely to decrease further, and if interest rates do decline in the future, refinancing is always an option.
In my opinion, home prices need to decrease by at least 40% before the market finds balance. For those unsure about buying property right now, seeking advice from an experienced financial advisor for optimal portfolio allocation is crucial. This approach has worked for me-I’ve managed to stay profitable over the past five years, accumulating nearly $1 million in investment returns.
That's impressive! I'd be happy to share more details. I understand the hesitation, especially when it feels like many firms offer similar services. However, finding a trustworthy advisor has been key to my success
Julianne Niemann Iwersen has consistently been my top recommendation. She’s widely recognized for her expertise in financial markets and has a strong track record. I highly recommend her.
Thank you for taking my advice. I'm glad you were able to research her background and feel confident moving forward. I hope your call goes well-her track record speaks for itself, and I'm optimistic you'll find her guidance valuable
In the early 1990s, when I bought my first home in Miami, first mortgages often came with rates of 8 to 9% and 9% to 10%, which was quite common. It's important to consider that we may never return to 3% rates. If sellers are compelled to sell, home prices may need to decrease, leading to lower valuations. I believe many others share this line of thinking.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Sharon Lee Peoples is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I’m glad at the end they mentioned that assumable mortgages are not advised if the owner has a lot of equity. Why you may ask? Because you have to pay the difference as your down payment.
So if they've been in their house for say 10 years and paid off 120k in principal, now the buyer has to put up 120k themselves if I understand that right. Does the buyer also have to put in a new down payment and repay closing costs? I assume so as well.
@@MrNightpwner correct for the first part and no for the second part in regards to paying an additional down payment. The difference the buyer pays is the new down payment. Yes, they do need to pay the closing costs as well.
@@joelpicolo7306 question. I have a fha loan 4% 200k. House has appreciated worth about 450k now. So over 200k equity. If I listed it for 550k using this method the buyer would be paying 100k over and need to have over 200k up front but the 3% loan difference will save them well over that 100k in interest for the life of the loan. Do you think this is something that would actually work for both parties or am I missing something? Thank you for any advice and knowledge in advance
@@MrNightpwner more simply explained, the buyer has to cover the difference between the purchase price - loan balance. You’re forgetting about the appreciation over the ten years.
Great to hear about a realtor that understands creative strategies! There could be opportunity for so many sellers to sell if more agents would learn about legal creative strategies to purchase. Getting a home loan directly through the bank isn't the ONLY way to purchase a home!
Just to clarify, this strategy still required them to get a loan from the bank, they just assumed the current mortgage versus getting one with a different lender. Also, the strategy worked well for them because the seller didn’t have any equity. If they had a lot of equity, the buyers would’ve had to pay the difference in cash, which could have been tens of thousands or hundreds of thousands of dollars.
Guys to do an assumable mortgage. You would have to pay the difference in equity.. meaning if there mortgage is 400,000 and they are selling you the house for $500,000 you are responsible to pay that $100,000
Not just that, if they mortgaged 400,000 and the house is worth 500,000 and they've already paid off 50,000 you would have to pay 150,000 up front. You need to pay the part they've paid off as well when calculating that equity.
Great video! For 2024, it’s hard to nail down specific predictions for the housing market because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
A lot of folks have been going on about a market rally and said that stocks would be experiencing significant growth this period any idea which stocks this may be? I just sold my home in the Boca Grande area and I’m looking to remunerate a lump sum into the stock market before stocks rebound, is this a good time to buy or no?
I took charge of my portfolio but faced losses in 2022. Realizing the need for a change, I sought advice from a fiduciary advisor. Through restructuring and diversification with dividend stocks, ETFs, Mutual funds, and REITs, my $1.2M portfolio surged, yielding an annualized gain of 28%.
Annette Christine Conte is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I find this informative, curiously explored Vivian on the web, spotted her consulting page, and was able to schedule a call session with her, she shows quite a great deal of expertise from her resume.. very much appreciated
I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task
I agree. Based on personal experience working with a financįal advlsor, I currently have $2 million in a well-diversified portfolìo that has experienced exponential growth from when i started. It's not only about having money to invest in stõcks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
A lot of people think the mortgage rate is the only major factor to consider when buying/owning a home, but dont forget the property tax. That can fluctuate as well arbitrarily. They can "appraise"/value your home based on market conditions and that could increase your property tax significantly and put you deep in a hole as much as the mortgage rate can if not more. This system is not for you.
my taxes/appraisal value has not double in 20 years Nassau County LI - meanwhile rates/mortgage payments doubled in 2 years - dont think the hole is as big as you think...
@@thepawns3835 lol I had to Google Nassau county LI. Surprised to find you're talking about long island. I would've thought property taxes would've increased there. But Google also seems to support your claim. Looks like they have republican legislators there that prevented any increases in property taxes for at least the last 14 years. That's pretty good for you guys. Congrats. Maybe I should move down there.
Lol my bad. I also forgot to mention home owners insurance. Your homeowners insurance might increase if they feel the "value" of your home increases for whatever reason. So there's that too. Basically there's always something to pay for and for the rest of your life.
Yea my property taxes were reassessed randomly and my escrow payments went up by $600. It’s a good thing I had the salary for it because it would have ruined someone else.
This is nothing new. The realtor understands creative financing which most don’t. In the real estate space this is called ‘Subject 2’ or Sub2. For those saying “oh you have to pay the difference in equity up front”. To that I say, you actually DON’T. Everything in life is negotiable, except death. The buyer and seller can come up with their own terms to pay the equity out over time OR a balloon payment after x amount of years. The bank just wants their money, and doesn’t care WHO carries the note. It is upon the seller and realtor to ensure the bank does not call the note ‘Due on Sale’ in which there is a workaround that as well.
Most likely, the taxes and insurance were already included (escrowed) with the monthly payment as this is a requirement with most lenders and I'm sure a title/land search was done as well before signing docs.
The issue with an assumable loan is that you have to come up with the asking price and existing mortgage balance difference. 3-5% down payment becomes 20%.
Its not that simple. The seller has to agree AND the buyer most likely does not have the cash pay the gap between mortgage and purchase price. It is also an extremely lengthy process.
You have to pay the difference or equity. You heard that they only made payments for a year and a half. They didn’t pay down much and house likely didn’t appreciate much. Not much equity or difference in the loan vs value.
Just to clarify, this strategy worked well for them because the seller didn’t have any equity. If they had a lot of equity, the buyers would’ve had to pay the difference in cash, which could have been tens of thousands or hundreds of thousands of dollars.
@@stown308 Most people don’t have hundreds of thousands of dollars available to pay the difference in the potential equity that a seller may have, so this technique is quite rare in practice. It really only works when there’s little equity in the home.
Not true on VA loans. Its two parts. One is the mortgage and two is the VA guarantee. Any buyer can assume a VA mortgage, and the buyer is responsible to pay that mortgage, period, end stop. If that buyer defaults, the seller is not on the hook financially for that mortgage. What is on the hook is the VA guarantee. The seller may not get their VA loan benefit restored until that mortgage is paid off. However, if the seller sells to another person who has and will use their VA loan benefit to fully assume the mortgage (part 1+2), the seller is not responsible for the mortgage and can immediately petition to get their VA loan benefit restored and available to make another VA home purchase. In no case is the seller liable for the buyer defaulting on the mortgage.
There should be different tiers for first time home owners interest rates, we shouldn’t be competing with multi-billion dollar companies for first time homes.
Not loop holes per se, but it is limited. You have to be able to pay up front for the equity the homeowner has already built up instead of a down payment per se. So if they have $300k in equity, you need to have $300k to start. You are taking over their loan, which means you have to pay for what they have already paid. As a result, this generally only works well for a new buyer if it is a somewhat recent purchase for the current owner. In this case, it was apparently only a few years (just before the rates started going up). You need it to be far enough back that the rate is much better, but not so far back that there is a LOT of equity and the upfront cost is too high... The other tricky part is, you need to qualify for their loan. So it is up to the bank who currently holds the mortgage to qualify you to assume it. And as they mentioned, most loans are NOT assumable, so this type of opportunity won't happen very often. But as a new homebuyer, you should definitely be seeing whether or not it is an option... Unlikely, but if there and you can afford it, it could save a huge amount.
Licensed LO and Realtor here…I’m glad they mentioned Conventional Loans are NOT assumable. There is a concept called “subject to” financing that a lot of social media reels talk about that’s basically a non-approved way to assume a Conventional. The videos make it seem it’s the same but in actuality, it’s breaching the contract and hoping the lender doesn’t notice or care. Be very wary of deals where someone mentions “subject to” or taking over an existing Conventional Mortgage
It’s been around a long time, it’s nothing new. Government already knows about it and actually allows you to find houses that are more eligible on your county website
Good for them. It’s not common and easy to do. But always ask if the loan is assumable. You will most likely have to put a larger down to cover the equity difference. So that’s the biggest challenge
Right. In theory, you can just buy the mortgage from the previous owners. Given that they have a favorable interest rate and still have considerable amount of principal in that loan, it makes financial sense.
One trick we just did when purchasing our first home (closing in a couple weeks) is buying down the interest rate to 5.6%. Of course not everyone has the means to do that but calculating it out it should pay off after about 7 years (we wanted to buy down more to around 5% flat but the mortgage company limited us on what we could put down for that). We didn’t see rates dropping too drastically in the next handful of years either so we didn’t want to gamble on being able to refinance.
The problem isn't rates (which are normal, by historical standards), but prices. Housing is about 40% overvalued, using median income and median price data.
Interest rates are NOT out of control. If you compare historically, they are about where they always have been. It's just that they have been so low for so long, many young people haven't seen rates this high so they think they are out of control. In the late 70s and early 80s they were like 15% so 7% is pretty normal.
The big difference is houses today cost more than double what they did back then when adjusted for inflation. Houses were more affordable with a 15% interest rate back then versus a 7% interest rate now.
Something to know is that the seller is still on the hook if the buyer defaults. Also, I know for VA sellers, they will not have their entitlement restored unless they sell to another VA buyer. Meaning, they can’t use the VA loan on their next purchase in most cases to non VA people. So good luck getting a seller to agree to that.
You basically have to get lucky if the previous owner hasn't put that much equity into the home otherwise, you'll be paying more overall even with the 3%+ rate.
Strange market where everyone is locked in place and nobody is willing to sell. Government lowered rates during covid and artificially distorted the market. Prices went up and never came down. Then rates were jacked up. Price needs to come down as rates go up. Something has to give.
I believe the seller of the assumable mortgage is still somehow liable if the buyer fails to pay. So, good luck to those trying to find a seller who will be liable for a property they already sold.
So what happens if the new owner defaults because he is she is out of work for say 6-9 mths ? The old owner got their equity back and is off the hook? This works if old owner did not have large equity in house because the new owner has to give old owner cash for that equity . If old owner had large equity , chances are young couple don’t have that kind of capital to pay the old owner . 75% mortgages out there not eligible for this set up said newscaster . It’s not going to be easy to find a match of buyer, seller and banks would are doing their due diligence on the deal. Lots more legal work to be done and higher closing costs.
You heard that right. Now I can get away with being Delinquent on my Mortgage by just passing the Debt onto you before the Real Estate dramatically Deprecates in value.
Not true, it’s similar to normal housing process. The buyer just needs to payoff the existing equity and closing cost. The vested owner will not be on the deed or mortgage and new buyer is now on the loan. All is it the buyer gets the house at the equity % and the interest rate. It’s a good deal if your able to find a property and the owner is willing to do an assumption loan.
@@Inyuasha824 its 100% true dude dont belive me go talk to a lender. The seller can still be responsible for the debt, even after the buyer assumes the loan, if the lender does not release the original borrower
Pay cash. If you can't afford it, it's simply out of your means. Not every 20 and 30 year old should be a homeowner; it's simply unsustainable and unrealistic. I suspect the ever increasing mortgage and car loan defaults and credit card balances will lead to a credit crisis, housing market collapse and economic recession in the next few years. And of course, hardly anyone will learn from that.
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2025. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
@@HRMColoniallifeinsurance Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
My CFA, Desiree Ruth Hoffman, is a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thank you for this tip. I must say, Desiree appears to be quite knowledgeable. After coming across her online page, I thoroughly went through her resume, and I must say, it was quite impressive. I reached out to her, and I have booked a session with her.
What they dont tell you is the fine print.... I.E. If you assume the mortgage whats the difference in price between the assumable and the the sale price (if the mortgage is 300k at 3.5% but the seller is selling the house for 500k where is the other 200k coming from?) and they said they didnt get another mortgage so.... they just had 200k sitting around in cash? or is the Seller underwater already that the original mortgage at 300k is the most they will get for the house? In this scenario the seller barely had any equity so the out of pocket cost to them is small but thats rarely the case for most people.... and if they only lived there 1 year and selling it again thats telling of handing the bag to someone else before a downturn.
they literally said this in the story and addressed how they were able to do so because the previous owner hadn't built up much equity...... Ppl keep saying downturn and over any LONG TERM period, home prices go up, again LONG TERM. Generational mindset is different than now mindset....
@@JB_Hobbies oh i totally agree with you but the problem in my eyes lies with the mortgage. If you assume the 1st mortgage and dont have enough cash for the difference, i would be hard pressed to find another lender to cover the difference because they would be second lien which a lot dont like to do unless its a heloc... but cant do that because you dont own the home yet.
@@Teknomanslade2 Ah, I see what you are saying. Yes, well, that assumption strategy really only works if the original lender is also willing to do a new loan for the difference, and I assume that the lender would also require a downpayment in at least the same amount as it would require for new financing covering the entire balance.
@@JB_Hobbies pretty sure buyer needs to pay the difference to the seller up front at closing. 200k down paid directly to seller. Seller now out of the equation now buyer assumes the remaining loan. Not sure just assuming that's how it works.
Well, just because this is amazing for a while, I'm still concerned something will scam them in the end. 3% is only good if it last for 30 years. This might last for a year or two, then they will get pig butchered by the bank.
![Noob To Max With DRAGON REWORK In Blox Fruits [FULL MOVIE]](http://i.ytimg.com/vi/LnBMOinoOvA/mqdefault.jpg)
Never thought about this. Congrats to everyone who can take an advantage of this.
It's time to acknowledge that a return to 3% mortgage rates may be unrealistic. If homeowners are forced to sell, we will likely see a drop in home prices, leading to lower property valuations. I know I'm not the only one who shares this outlook.
If you're in the market, now is the time to buy. Home prices are unlikely to decrease further, and if interest rates do decline in the future, refinancing is always an option.
In my opinion, home prices need to decrease by at least 40% before the market finds balance. For those unsure about buying property right now, seeking advice from an experienced financial advisor for optimal portfolio allocation is crucial. This approach has worked for me-I’ve managed to stay profitable over the past five years, accumulating nearly $1 million in investment returns.
That's impressive! I'd be happy to share more details. I understand the hesitation, especially when it feels like many firms offer similar services. However, finding a trustworthy advisor has been key to my success
Julianne Niemann Iwersen has consistently been my top recommendation. She’s widely recognized for her expertise in financial markets and has a strong track record. I highly recommend her.
Thank you for taking my advice. I'm glad you were able to research her background and feel confident moving forward. I hope your call goes well-her track record speaks for itself, and I'm optimistic you'll find her guidance valuable
In the early 1990s, when I bought my first home in Miami, first mortgages often came with rates of 8 to 9% and 9% to 10%, which was quite common. It's important to consider that we may never return to 3% rates. If sellers are compelled to sell, home prices may need to decrease, leading to lower valuations. I believe many others share this line of thinking.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes. If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Sharon Lee Peoples is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you for this amazing tip. I verified her and booked a call session with her. She seems Proficient.
I just checked her out and I have sent her an email. I hope she gets back to me soon
I’m glad at the end they mentioned that assumable mortgages are not advised if the owner has a lot of equity. Why you may ask? Because you have to pay the difference as your down payment.
So if they've been in their house for say 10 years and paid off 120k in principal, now the buyer has to put up 120k themselves if I understand that right. Does the buyer also have to put in a new down payment and repay closing costs? I assume so as well.
@@MrNightpwner correct for the first part and no for the second part in regards to paying an additional down payment. The difference the buyer pays is the new down payment. Yes, they do need to pay the closing costs as well.
@@joelpicolo7306 question. I have a fha loan 4% 200k. House has appreciated worth about 450k now. So over 200k equity. If I listed it for 550k using this method the buyer would be paying 100k over and need to have over 200k up front but the 3% loan difference will save them well over that 100k in interest for the life of the loan. Do you think this is something that would actually work for both parties or am I missing something? Thank you for any advice and knowledge in advance
@@MrNightpwner more simply explained, the buyer has to cover the difference between the purchase price - loan balance. You’re forgetting about the appreciation over the ten years.
@@waynepetersen9082yea and that can be easily over a hundred thousands of dollars
Very happy for the second half of the video. It’s not nearly this simple and they explained it well in a short time.
Great to hear about a realtor that understands creative strategies! There could be opportunity for so many sellers to sell if more agents would learn about legal creative strategies to purchase. Getting a home loan directly through the bank isn't the ONLY way to purchase a home!
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Just to clarify, this strategy still required them to get a loan from the bank, they just assumed the current mortgage versus getting one with a different lender. Also, the strategy worked well for them because the seller didn’t have any equity. If they had a lot of equity, the buyers would’ve had to pay the difference in cash, which could have been tens of thousands or hundreds of thousands of dollars.
This only works if a seller is desperate like they need to sell or else they'll have to foreclose.
Im happy for this couple and their family ❤
Guys to do an assumable mortgage. You would have to pay the difference in equity.. meaning if there mortgage is 400,000 and they are selling you the house for $500,000 you are responsible to pay that $100,000
Seller can carryback financing or you can get a secondary loan.
@@TheNativeTwo but then the secondary loan would be at todays market interest rate. All im saying is its not as easy as it sounds.
Jesus why didn't they just say that. I had to watch 4 times. The news narrator and realtor are bad at explaining.
Not just that, if they mortgaged 400,000 and the house is worth 500,000 and they've already paid off 50,000 you would have to pay 150,000 up front. You need to pay the part they've paid off as well when calculating that equity.
@@KenW418that 50k couldnt be in the loan? i dont see why not
Great video! For 2024, it’s hard to nail down specific predictions for the housing market because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
A lot of folks have been going on about a market rally and said that stocks would be experiencing significant growth this period any idea which stocks this may be? I just sold my home in the Boca Grande area and I’m looking to remunerate a lump sum into the stock market before stocks rebound, is this a good time to buy or no?
I took charge of my portfolio but faced losses in 2022. Realizing the need for a change, I sought advice from a fiduciary advisor. Through restructuring and diversification with dividend stocks, ETFs, Mutual funds, and REITs, my $1.2M portfolio surged, yielding an annualized gain of 28%.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
Annette Christine Conte is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I find this informative, curiously explored Vivian on the web, spotted her consulting page, and was able to schedule a call session with her, she shows quite a great deal of expertise from her resume.. very much appreciated
I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task
I agree. Based on personal experience working with a financįal advlsor, I currently have $2 million in a well-diversified portfolìo that has experienced exponential growth from when i started. It's not only about having money to invest in stõcks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
'Melissa Elise Robinson' is the advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I have heard of this. The problem is that a person that wants to move has to try and find a house that is eligible.
The government is going to ban this soon😂😂
No they won’t
No they won't. Assumable mortgages are nothing new.
That's nothing new lol
This administration is culpable of anything you thought wasn’t possible 😂
It's been there 4 ever
A lot of people think the mortgage rate is the only major factor to consider when buying/owning a home, but dont forget the property tax. That can fluctuate as well arbitrarily. They can "appraise"/value your home based on market conditions and that could increase your property tax significantly and put you deep in a hole as much as the mortgage rate can if not more. This system is not for you.
my taxes/appraisal value has not double in 20 years Nassau County LI - meanwhile rates/mortgage payments doubled in 2 years - dont think the hole is as big as you think...
@@thepawns3835 lol I had to Google Nassau county LI. Surprised to find you're talking about long island. I would've thought property taxes would've increased there. But Google also seems to support your claim. Looks like they have republican legislators there that prevented any increases in property taxes for at least the last 14 years. That's pretty good for you guys. Congrats. Maybe I should move down there.
Lol my bad. I also forgot to mention home owners insurance. Your homeowners insurance might increase if they feel the "value" of your home increases for whatever reason. So there's that too. Basically there's always something to pay for and for the rest of your life.
Yea my property taxes were reassessed randomly and my escrow payments went up by $600. It’s a good thing I had the salary for it because it would have ruined someone else.
Very happy for this family!!!
This is nothing new. The realtor understands creative financing which most don’t. In the real estate space this is called ‘Subject 2’ or Sub2.
For those saying “oh you have to pay the difference in equity up front”. To that I say, you actually DON’T. Everything in life is negotiable, except death. The buyer and seller can come up with their own terms to pay the equity out over time OR a balloon payment after x amount of years. The bank just wants their money, and doesn’t care WHO carries the note. It is upon the seller and realtor to ensure the bank does not call the note ‘Due on Sale’ in which there is a workaround that as well.
Great if the owner kept up with property taxes if not you become responsible for the back pay for the mortgage.
Oh I totally didn’t think of that 🤔. Good point.
Most likely, the taxes and insurance were already included (escrowed) with the monthly payment as this is a requirement with most lenders and I'm sure a title/land search was done as well before signing docs.
Taxes are included in mortgage payments
If there was a tax lien on the house, they wouldn’t be able to sell it?
Awesome idea...glad it worked on tbis family's favor
The issue with an assumable loan is that you have to come up with the asking price and existing mortgage balance difference. 3-5% down payment becomes 20%.
Good for them! What sweet family. ❤
It was used a lot in the 70s and 80s. It takes a lot to buy out the seller but it works. I called this months ago
Its not that simple. The seller has to agree AND the buyer most likely does not have the cash pay the gap between mortgage and purchase price. It is also an extremely lengthy process.
Creative Ways!
I am happy for them.
I looked into this as a home seller as a possible way to increase my sale price. Not all mortgage companies allow this, unfortunately, mine included.
Very true. That’s also part of the story they don’t tell you.
There aren't many of those loans out there like this. Also the seller has equity who is paying for that? Their not telling the whole story!!!
You have to pay the difference or equity. You heard that they only made payments for a year and a half. They didn’t pay down much and house likely didn’t appreciate much. Not much equity or difference in the loan vs value.
It seems this couple has worked with a great realtor! Congratulations to all parties involved!
Love it. This could help a lot of ppl if they can handle the upfront costs.
Very creative and truly worth it if you have the equity built into the house.
Just to clarify, this strategy worked well for them because the seller didn’t have any equity. If they had a lot of equity, the buyers would’ve had to pay the difference in cash, which could have been tens of thousands or hundreds of thousands of dollars.
This is very rare, only a few hundred available per year
Not as easy as it seems. Longer closing time and you need to pay the equity difference in cash.
But 2 or 3% lower interest saves you 100-500k over the life of the loan.
@@stown308 Most people don’t have hundreds of thousands of dollars available to pay the difference in the potential equity that a seller may have, so this technique is quite rare in practice. It really only works when there’s little equity in the home.
It only takes like 6 months for the loan to process.....
They failed to mention that if new buyer default on the loan, seller is still liable.
Which is why this is extremely rare. If I'm the owner of this house and sell this way - I LOST
Not true on VA loans. Its two parts. One is the mortgage and two is the VA guarantee. Any buyer can assume a VA mortgage, and the buyer is responsible to pay that mortgage, period, end stop. If that buyer defaults, the seller is not on the hook financially for that mortgage. What is on the hook is the VA guarantee. The seller may not get their VA loan benefit restored until that mortgage is paid off. However, if the seller sells to another person who has and will use their VA loan benefit to fully assume the mortgage (part 1+2), the seller is not responsible for the mortgage and can immediately petition to get their VA loan benefit restored and available to make another VA home purchase. In no case is the seller liable for the buyer defaulting on the mortgage.
@@KungPowEnterFist wild. these things are always more complicated than the surface. thank you for the explanation.
God bless that family
In my country morgages are around 10-11% although its fix for the entire loan.
There should be different tiers for first time home owners interest rates, we shouldn’t be competing with multi-billion dollar companies for first time homes.
Wow a Realtor who actually earned their commission
It takes 4-6 months to get the paperwork processed.
Nah there has to be a loop hole
what do you think the loop hole is?
I think it is you have to pay the equity the house has up front. So you would need to have some cash saved.
Not loop holes per se, but it is limited.
You have to be able to pay up front for the equity the homeowner has already built up instead of a down payment per se.
So if they have $300k in equity, you need to have $300k to start. You are taking over their loan, which means you have to pay for what they have already paid. As a result, this generally only works well for a new buyer if it is a somewhat recent purchase for the current owner. In this case, it was apparently only a few years (just before the rates started going up).
You need it to be far enough back that the rate is much better, but not so far back that there is a LOT of equity and the upfront cost is too high...
The other tricky part is, you need to qualify for their loan. So it is up to the bank who currently holds the mortgage to qualify you to assume it.
And as they mentioned, most loans are NOT assumable, so this type of opportunity won't happen very often.
But as a new homebuyer, you should definitely be seeing whether or not it is an option...
Unlikely, but if there and you can afford it, it could save a huge amount.
No loophole just gotta have a ton of cash
Im happy for this family
If the sellers jsut want to rent or downgrade this works. If not, who would want to give up their mortgage for a higher rate
Licensed LO and Realtor here…I’m glad they mentioned Conventional Loans are NOT assumable. There is a concept called “subject to” financing that a lot of social media reels talk about that’s basically a non-approved way to assume a Conventional. The videos make it seem it’s the same but in actuality, it’s breaching the contract and hoping the lender doesn’t notice or care. Be very wary of deals where someone mentions “subject to” or taking over an existing Conventional Mortgage
This ia the type of info you *DO NOT* put on National TV for the government to shut down
It’s been around a long time, it’s nothing new. Government already knows about it and actually allows you to find houses that are more eligible on your county website
Basically I got a rate at a certain price knowing I could double down up front and got a locked in rate.
Only certain loans are assumable though and often times the buyers must have lots of cash on hand to pay the difference 😔
So it’s bs for 77% of buyers
Yes; If not 90% of buyers 😜😂
The rates were artificially low due to the pandemic. This is about the norm. This is really a VERY specific situation where it worked.
the average person now buys the type of home a factory owner would have lived in in the 1950s
Wow! That's was some great information.
It’s not the rate it’s the price people
Unemployment needs to go up. Then, people will be forced to lower prices and sell.
Good for them. It’s not common and easy to do. But always ask if the loan is assumable.
You will most likely have to put a larger down to cover the equity difference. So that’s the biggest challenge
make all conventional loans (temporarily) assumable for first time home buyers.
Right. In theory, you can just buy the mortgage from the previous owners.
Given that they have a favorable interest rate and still have considerable amount of principal in that loan, it makes financial sense.
One trick we just did when purchasing our first home (closing in a couple weeks) is buying down the interest rate to 5.6%. Of course not everyone has the means to do that but calculating it out it should pay off after about 7 years (we wanted to buy down more to around 5% flat but the mortgage company limited us on what we could put down for that). We didn’t see rates dropping too drastically in the next handful of years either so we didn’t want to gamble on being able to refinance.
Im happy it worked out for them
So tired of tic tok being referenced in “journalism”
Well news is news. I go tell a buddy something I heard in person that’s news. Tik tok only streamlines it. No I don’t use Tik tok
Great. Hope that banks do not come out something to prohibit it in the future.
Wow, that’s awesome.
Its so impossible to buy a house right now... income over 100k and still cant get it done.
The problem isn't rates (which are normal, by historical standards), but prices. Housing is about 40% overvalued, using median income and median price data.
Interest rates are NOT out of control. If you compare historically, they are about where they always have been. It's just that they have been so low for so long, many young people haven't seen rates this high so they think they are out of control. In the late 70s and early 80s they were like 15% so 7% is pretty normal.
The big difference is houses today cost more than double what they did back then when adjusted for inflation. Houses were more affordable with a 15% interest rate back then versus a 7% interest rate now.
Combined with purchase price it is out of control
Assumable loans have been around for ages
I love that for them ❤️ God bless!
Knew about this about 3 years ago or so..
Nice that dude is worth hiring. He knows his stuff
Awesomeeeeeeeee! Chris will have another helper assisting him soon. 🙂
Something to know is that the seller is still on the hook if the buyer defaults. Also, I know for VA sellers, they will not have their entitlement restored unless they sell to another VA buyer. Meaning, they can’t use the VA loan on their next purchase in most cases to non VA people. So good luck getting a seller to agree to that.
You basically have to get lucky if the previous owner hasn't put that much equity into the home otherwise, you'll be paying more overall even with the 3%+ rate.
Strange market where everyone is locked in place and nobody is willing to sell. Government lowered rates during covid and artificially distorted the market. Prices went up and never came down. Then rates were jacked up. Price needs to come down as rates go up. Something has to give.
Just what i needed to know
I believe the seller of the assumable mortgage is still somehow liable if the buyer fails to pay. So, good luck to those trying to find a seller who will be liable for a property they already sold.
That's amazing!
Houses were made for banks, not families
Youre mortgage oayment only goes up if its not fixed. Why wouldnt you get a fixed mortgage?
It is fixed. It’s a government loan they are assuming.
So what happens if the new owner defaults because he is she is out of work for say 6-9 mths ?
The old owner got their equity back and is off the hook?
This works if old owner did not have large equity in house because the new owner has to give old owner cash for that equity .
If old owner had large equity , chances are young couple don’t have that kind of capital to pay the old owner .
75% mortgages out there not eligible for this set up said newscaster . It’s not going to be easy to find a match of buyer, seller and banks would are doing their due diligence on the deal.
Lots more legal work to be done and higher closing costs.
You heard that right. Now I can get away with being Delinquent on my Mortgage by just passing the Debt onto you before the Real Estate dramatically Deprecates in value.
Good ole Johnny sins is a real estate agent now
Smart idea!
In nj good luck buying this
That chick talking in the car has no idea how a mortgage works, so she acts like it's smart to rent.
One of the few realtors to get paid their worth
Waiting for the banks to lobby to stop this.
dont forget to tell them that if they default on the loan the original borrower is still liable.....
Not true, it’s similar to normal housing process. The buyer just needs to payoff the existing equity and closing cost. The vested owner will not be on the deed or mortgage and new buyer is now on the loan.
All is it the buyer gets the house at the equity % and the interest rate. It’s a good deal if your able to find a property and the owner is willing to do an assumption loan.
@@Inyuasha824 its 100% true dude dont belive me go talk to a lender. The seller can still be responsible for the debt, even after the buyer assumes the loan, if the lender does not release the original borrower
This is the only way I’d buy house today
Pay cash. If you can't afford it, it's simply out of your means. Not every 20 and 30 year old should be a homeowner; it's simply unsustainable and unrealistic. I suspect the ever increasing mortgage and car loan defaults and credit card balances will lead to a credit crisis, housing market collapse and economic recession in the next few years. And of course, hardly anyone will learn from that.
This is a nightmare waiting to explode!!!
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2025. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
Investing in real estate and stocks might be a wise choice, particularly if you have a sound trading plan that can get you through profitable days.
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
@@HRMColoniallifeinsurance Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
My CFA, Desiree Ruth Hoffman, is a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thank you for this tip. I must say, Desiree appears to be quite knowledgeable. After coming across her online page, I thoroughly went through her resume, and I must say, it was quite impressive. I reached out to her, and I have booked a session with her.
Due on sale clause. This exists in 99% of loans
They had to move to Florida for work?? What work??
They are so lucky
What they dont tell you is the fine print.... I.E. If you assume the mortgage whats the difference in price between the assumable and the the sale price (if the mortgage is 300k at 3.5% but the seller is selling the house for 500k where is the other 200k coming from?) and they said they didnt get another mortgage so.... they just had 200k sitting around in cash? or is the Seller underwater already that the original mortgage at 300k is the most they will get for the house? In this scenario the seller barely had any equity so the out of pocket cost to them is small but thats rarely the case for most people.... and if they only lived there 1 year and selling it again thats telling of handing the bag to someone else before a downturn.
they literally said this in the story and addressed how they were able to do so because the previous owner hadn't built up much equity...... Ppl keep saying downturn and over any LONG TERM period, home prices go up, again LONG TERM. Generational mindset is different than now mindset....
Assuming the difference makes up for closing costs, it’s better to have a chunk at a lower rate than to have the whole thing at a high rate.
@@JB_Hobbies oh i totally agree with you but the problem in my eyes lies with the mortgage. If you assume the 1st mortgage and dont have enough cash for the difference, i would be hard pressed to find another lender to cover the difference because they would be second lien which a lot dont like to do unless its a heloc... but cant do that because you dont own the home yet.
@@Teknomanslade2 Ah, I see what you are saying. Yes, well, that assumption strategy really only works if the original lender is also willing to do a new loan for the difference, and I assume that the lender would also require a downpayment in at least the same amount as it would require for new financing covering the entire balance.
@@JB_Hobbies pretty sure buyer needs to pay the difference to the seller up front at closing. 200k down paid directly to seller. Seller now out of the equation now buyer assumes the remaining loan. Not sure just assuming that's how it works.
As a loan originator for last 19 years, your chances of finding and assumable mortgage are next to zero
😒🤥
This is supposed to be something every realtor should know. These ditsy realtors that just show houses are clowns.
Genius.
You assume a low mortgage but you got to get a second mortgage to cover the difference in the equity/listing price. Now you have two mortgage 🤔
Just buy it with cash... No mortgage, or death loan, that way.
Buy in cash
Voting Biden out will be a creative way to lower my mortgage rate!
There is also seller financing where the seller themselves act as the bank.
Risky move if your buyer defaults on the loan?
@@birdsofparadise1you get the house back
That works if the seller does not have a mortgage. That was not the case here.
You know if this a thing in the next couple years the market finna collapse hard.
Well, just because this is amazing for a while, I'm still concerned something will scam them in the end. 3% is only good if it last for 30 years. This might last for a year or two, then they will get pig butchered by the bank.