Things To Keep In Consideration When Assuming A Mortgage

A good way to buy property with less money is to assume a mortgage. When you assume a mortgage the mortgage is transferred from the seller's name to the buyer’s name. When you do this there are some things you should keep in consideration. One thing you should keeping consideration before you assume a mortgage is can you afford to make the monthly payments. If you assume a mortgage and you can't afford the payments you can end up losing the house and damaging your credit. It is recommended that you make an assessment and see if you can afford the monthly payments.

Another thing you should keep in consideration before assuming a mortgage is the value of the property. If you assume a mortgage and the seller overpaid for the house, you can lose money if you decide to resell the property. One way to avoid this is to know the prices of the houses in the area in witch the house is located in. You can find the prices of the houses in the area by researching the local newspaper. Most local newspapers will have a real estate section with a list of houses for sale.

One last thing you should keep in consideration before assuming a mortgage is the terms and the interest rates. It is recommended that the mortgage is a fix rate mortgage. This is a mortgage that the monthly payments stay the same for the life of the loan. If the mortgage is an adjustable rate mortgage your monthly payments can go up and you can lose the house. Assuming a mortgage can save you a lot of money if done right. If you use the information you read here you will know some things to look out for when assuming a mortgage.

Ditech : 50 Year Mortgage

Recently, the 50 year mortgage enters the market with a bang. It all started on San Bernardino of Southern California. Now, a handful of mortgage lenders offer this mortgage option. It is just a few months after the re-incarnation of 40 year mortgage. The 40 year mortgage debuts around the 1980s.

Due the soaring house prices, there were demands for longer mortgage. The house prices went up so high at Southern California. Consequently, the high house prices stop the American dream. We all want to own something called home in our lifetime. So, the cash-strapped home buyer wants to opt for longer mortgage. In fact, mortgage lenders get tons of phone enquiries about 50 year mortgage.

The 50 year mortgage provides another alternative to interest only mortgage, and adjustable rate mortgage. During the high house prices time, the cash-strapped home buyers opt for interest only mortgage, or adjustable rate mortgage. Naturally, the mortgage payment is lower like the interest only mortgage, or adjustable rate mortgage.

In interest only mortgage, the home owner only pays the interest. The principal stays the same thru out the life of the mortgage. In adjustable rate mortgage, the home owner pays same mortgage payment on a regular basis. Some portion of adjustable rate mortgage payment goes to pay out the principal. In some instances, adjustable rate mortgage payment does not cover payment on principal. This is more commonly known as negative amortization. This happens when the interest rate goes up.

The home owners still gains home equity. This is the main advantage of 50 year mortgage over the interest only mortgage and adjustable rate mortgage. However, the home owner gains more home equity faster with shorter term mortgage. Not to mention, the home owner pays more interest at the maturity of the mortgage.

Mortgage lenders actually prefer a shorter mortgage like 15 year mortgage. Generally, the longer term mortgage has more chance that the home owner will be in financial trouble. Fifty percent of the first-time home buyers are on 30 years old or older. The mortgage matures around at the age of 80 years old. That is long after the normal retirement age.

50 year mortgage is riskier type of mortgage to mortgage lenders. So, the mortgage lenders would usually charge a higher interest rate. Even though the mortgage lenders charges higher interest rate, the mortgage payments are actually lower than shorter term mortgage.

The home buyers can opt to buy higher priced home with 50 year mortgage. Or, the home buyers can save or invest the money from savings of the lower mortgage payments. This may be a better idea for unstable house prices when there is a chance for homes to depreciate.