I currently have an FHA mortgage on my home; I’ve been paying just about 3.5 years on this note. I want to sell to take advantage of the market right now but realistically would have to invest money to sell due to the current market conditions.
I am thinking about looking to have someone assume my FHA mortgage which I have read is do-able pending my banks approval. Can this in anyway effect my credit score? Are there any negatives to this, outside of not making money on the transaction?
I have also read that I may be responsible for the payments if the new buyer defaults….Is this right? Is there any way around that?
Thank you for the responses. Yes my mortgage is assumable, I have verified with the bank (Citi Financial.) Being that I bought the home nearly 4 years ago in Cleveland, there is absolutely no equity in home. On average home prices are down 24% in this area. I am not willing to invest several thousand dollars into selling the home. It is not feasible that I would be able to sell the house without a significant investment.
I am but willing to walk away at a “break even.”
Is there a way to go through an assumption and not be liable for the new buyers credibility? I know that Citi will have a complete background/credit check prior to the assumption to ensure that the buyer is mortgage worthy.
Yes, my interest rate in competitive. It is slightly above what is available now, but an assumption would allow a buyer to buy my home with substantially less out of pocket costs. With the assumption a buyer will not need the 3.5-20% that is required for any loan in the area (USDA is not applicable) and the closing costs are approximately a third of a standard buy.
Tax Credit for First Time Home Buyers with Low Down Payment. Lender Finance Program with Low Payment and Fixed Interest Rate on FHA Mortgage and.