Giving some thought to the financing of real estate, I wondered whether most loans issued over the past few years are assumable. Why would anyone care? Money, of course.
While interest rates have been low, low, low for a long time, they’re rising again now. New loans taken out today are virtually guaranteed to have higher interest rates. If a buyer can assume the sellers’ loan at an advantageous interest rate, that fact alone would be worth thousands of dollars.
Similarly, county & city transfer fees are based on the amount of money used in transferring the property, exclusive of any loans assumed in the process. While probably not thousands of dollars, there could certainly be a substantial savings.
So, if you’re thinking about selling your home, it might be worthwhile to haul out that old loan contract and determine if the loan is assumable. Some buyers may be very much attracted by the opportunity to save. Possibly enough to offer even more for your home + loan, than for another sellers’ home without an assumable loan.
We’re curious. Is your loan assumable? Do you know someone who has assumed a loan recently? Let us know. Write, call, post, or otherwise contact us. We’ll let you know what we discover in a future post.