Over the past few years, we have seen record-breaking interest rates in the housing market. As a result,
assuming a loan has not been a popular option for most buyers. However, with the interest rates on the
rise, buyers are beginning to consider this option again. Here are four advantages of assuming a loan:
1. Lower interest rates. One of the primary advantages of assuming a loan is that you might be able
to take advantage of a lower interest rate. For example, if you assume a loan from someone who purchased
a home two years ago and was able to get a 3% interest rate, you can take over that interest rate as well.
This means you can save thousands of dollars in closing costs because you're not generating a new loan.
By working through the costs associated with transferring that loan over to you, you can enjoy a lower
interest rate.
2. Fewer closing costs. When you assume a loan, many of the costs associated with buying a home will
not exist. You're only working through the costs associated with transferring that loan over to you.
This means that you can save a significant amount of money on closing costs.
"Loan assumptions are becoming more popular
again due to lower rates."
3. Shorter long term. Another advantage of assuming a loan is that you will inherit the long term from the
seller, which can be significantly shorter than a new long term. This means that you can pay off
your loan faster and be debt-free sooner.
4. Lower monthly payments. Finally, assuming a loan can lead to significantly lower monthly payments.
A lower interest rate and a lower loan amount can help reduce your monthly payments. This can be a great
option for those who want to reduce their monthly expenses and save money.
If you're interested in assuming a loan, it's important to work with a professional who can guide you
through the process. If you have any questions or are ready to get started, call or email us right away.
