How does the "Assumption of mortgage" technique work?

Hi Basically you need to have a mortgage that is assumable. If the bank or note holder will allow you to assume the mortgage payments, they most likely will look at your credit and your debt to income ratio. They, the bank want to know that you can pay the payments every month.

Ok but I still don't see how the seller would accept a deal like this and I also don't see how your suppose to buy the property from the seller if they ain't gonna get any of the payments. Can someone please explain how this all works? Thanks.

The seller will except a deal like this if they are not able to keep up with their mortgage payments.They want out of the house because of a divorce, loss of job, any situation can arise. Because they wan to protect their credit. To keep them from being in foreclosure, they are relocating. Many reason's to their benefit. The bank qualifies you based on your ability to make payments. You now become the new buyer. Continued success.......Lubertha

Are HELOC loans assumable?

Almost no loans are assumable these days. They are generally only on older loans. But they are out there, so if you can find one, it may work out for you. Good luck! Tom

Can I use a third party escrow company to assume a non-assumable loan?

Can I use a third party escrow company to assume a non-assumable loan?

A non assumable loan cannot be assume by a new buyer. You will have to get a whole new mortgage to buy the property.

Really? Even if I set up a third party escrow?

what exactly are you trying or tempting to do with third party escrow? Paint the picture for me I'm not seeing what you're trying to do. All I know is a non assumable is not assumable by anybody meaning you can't take over that seller's original mortgage on the property.

Well with an escrow account I intend to keep the mortgage in the seller's name while I make payments to the escrow that will in turn pay off the seller's mortgage. So technically I'm not personally assuming the payments. But I'm not exactly sure how escrow works so that's why I asked the question.

If you have a motivated seller who just wants to get out from the house,due to financial problems and they agree to let you assume the mortgage,then you go to an escro company and have the contract drawn up to where you will make the payment on the house until the loan is paid off or you refinance the house or sell it and let the new buyer get a mortgage on it to pay off the exsisting loan on it,but the house will remain in the original owners name on the exsisiting mortgage, until you pay off the original loan on the house or refinance it in your name.

Good Luck & Good Investing

So are you saying that I can't assume a non-assumable loan with a third party escrow? I need to know whether or not I can or not, because I got something really good in mind if I can.

What you are speaking of is called a WRAPAROUND MORTGAGE.

WRAPAROUND MORTGAGES - What are they and how do they work?
http://www.deangraziosi.com/real-estate-forums/financing-and-credit/1784...

Use Wraparound Mortgages To Strcture Better Deals!
http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

I already know what a wraparound mortgage is, no one seems to understand what I'm getting at. So since no one can pinpoint exactly what I'm talking about I'll just tell you guys what I had in mind. Ok what I was thinking of doing by assumption of mortgage was buying a property by having the owner pull out a certian amount of equity in their house and let me pay the debt of their HELOC loan, by assuming it of course. And since I was thinking that HELOC aren't assumable, I would set up a third party escrow with the permission of the owner of the house, and then I would just pay the escrow and then the escrow will pay the HELOC back. The owner would then leave the payments to me and I would get the property.

It's pretty complicated and I don't know if it can be done. But if my question could just get answered, I would know for sure if it can or not. And that question is "can I assume a non-assumable loan with a third party escrow?"

If you want to assume an exsisting mortgage from the seller,you may want to use a Bond For Deed,you can set it up through the escrow company.you will take over payments on the house ,but the mortgage will still be in the original owners name until you refinance the house with a new mortgage and payoff the old mortgage.Hope this helps

Good Luck & Good Investing

whurndon

Still not the answer I was looking for but thanks anyway whurndon. I don't wanna sound like a little whinny baby by repeating myself so I guess I just have to find this one out for myself lol. Thanks again for trying though, and good luck to you as well.

In going over what you stated in your post,why do you need the owner to pull equity out of the for,just assume the mortgage through (Bond for Deed) that can be handled by the escrow company and take over the payments.

Good Luck & Good Investing

whurndon

Well first off, lets say a guy needs money for moving, and simply assuming his mortgage and letting him off the hook won't cut it. Well since that's the case I would simply let him pull out whatever amount of equity he needs to move, and then I would simply take over the payments on both his HELOC loan and his original mortgage.

But again I don't know if this can be done or not.