Consumption and Real Estate
Can arm mortgage loan be transferred to another person?
Question : Can arm mortgage loan be transferred to another person?
I want to buy a house from my neighbor, He has arm loan with pretty low rate, He is saying that the load could be transferred under my name without any rate change.Is that possible ?
*loan could be transferred
arm mortgage
Best answer:
Answer by felix the cat
You might be better off just taking a higher fixed rate mortgage right now. Arms are dangerous and they’re a big reason why we are in the economic situation we are in. 30 year fixed rates right now are around 4.875 and you don’t ever have to worry about it adjusting. His rate might be low now but if he’s looking to sell the house hes probably been in it for a while and it might be adjusting soon.
Huh? I would first advise you to be extra extra cautious with mortgage advice from your neighbor OR the person who wants you to buy the house. Big alarm bells should go off. Mortgages are a complicated business these days.
The ONLY mortgages that can be transferred – (we call it “assumable” in the business), are FHA loans.
The assumption of mortgages is something that rarely occurs, for various reasons. When it does happen, you can bet your wallet that the mortgage being assumed has a really low rate compared to current interest rates. Also, if you were to assume his mortgage, you would have to qualify for the loan – just as you would a brand new loan.
But with rates so low these days, I cannot imagine anyone has an adjustable rate loan (of all things) worth assuming. And even suppose he does have an adjustable rate FHA mortgage and you did assume it, your rate could change at some point. You would assume whatever your neighbor has in its entirety. “Adjustable” means “adjustable” regardless whether you have the loan or he has the loan.
You should apply for your own loan.
Good luck.