High Interest Rates Got You Down? We Got You Covered!
It's no secret right now that high interest rates have put a thorn in the side of many buyers and would-be buyers alike. The difference in the monthly payment for a $500,000 at a 7% rate vs. a 3% rate can be thousands of dollars, and that's a hard pill to swallow for folks looking to purchase their primary residence. It's worth mentioning that there are many great new construction options out there where the home builders are offering "subsidized" in-house financing at lower interest rates - and if you're open to new construction we'll definitely want to explore these financing incentives.
However, many people don't know that there are actually hundreds of resale properties on the market in Austin right now that offer an assumable loan. An assumable loan is a loan that you can, well, assume from the existing Owner and inherit their current interest rate. Of course, there are some stipulations you'll want to be aware of when working with your MoveGroove agent:
- As property values have increased in recent years, in most cases the sales price will exceed the assumable loan amount. That means that the difference in the assumable loan and the purchase price will need to be made up by a combination of your down payment and a second mortgage. So the rate of the second mortgage will be a "market rate" but there are plenty of low down payment option.
- Many of the assumable loans are either FHA or VA. It's important to note that FHA assumable loans will have the same restrictions as originating FHA loans - namely that the home would need to be a primary residence and cannot be an investment property. Likewise, VA assumable loans would be restricted to qualifying Veterans.
