Military VA Streamline Loans
There are numerous types of mortgages available to people, but if you are looking for a way that costs you little to no money down, then an assumable mortgage may be an option for you. An assumable mortgage is when the seller of the property transfers the property to the buyer along with the mortgage that is already in place. The buyer actually pays the seller the difference between the existing mortgage and how much the seller wants for the house as if they selling it through conventional means. VA assumability mortgages are even available and if you can take advantage of a VA assumability mortgage, you could find yourself paying considerably less on your home than if you go through a conventional method.
Why a VA assumability mortgage?
A VA assumability mortgage should be considered if you are interested in getting a home for a considerably lower amount of money. If you are interest in VA assumability, you need to find out when the house was closed on and the original mortgage taken out. This matters because if the VA assumability mortgage you want to assume was closed before March 1, 1988, you can simply assume the payment without the permission of the mortgage lender. The seller would still be liable for the mortgage is the buyer defaults on the VA assumability mortgage.
If, however, if the house was closed on or after March 1, 1988, you will have to be approved by the current lender to take over the VA assumability mortgage. You would be required to go to the Veteran’s Administration with the seller to apply for approval for the assumption. If the VA approves the deal, the VA assumability mortgage would be transferred to you and the seller would be discharged from all liability. You would still be responsible for paying the seller any difference in the amount of money the mortgage was for and how much the seller wants for the house.
What about fees on a VA assumability mortgage?
If you are turning your mortgage into a VA assumability mortgage, then as the seller you should ask that the buyer be underwritten by the agency. Assumption fees may or may not apply, and if they do, quite often the buyer will pay them. You also need to make sure that there are no additional closing costs you are going to be assessed.
Assumable mortgages including VA assumability ones are rare in the mortgage world. Many lenders try to avoid them because of the difficulty they have tracking who is responsible for paying off the debt. But a VA assumability mortgage is a good way to get into a home for little to no money down with a low interest rate and lower monthly payment. If you have trouble getting a conventional loan, ask your real estate agent about VA assumability and see if there are any homes out there that would work for you.
