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Are assumable mortgage loans legal in the United States? Additionally, let's say an individual chooses to use Roam to sell their home and transfer the mortgage

Are assumable mortgage loans legal in the United States? Additionally, let's say an individual chooses to use Roam to sell their home and transfer the mortgage. In a normal market, the interest rate is unique to the buyer, but in the Roam market, the interest rate is now on sale as part of the house deal. This will increase demand for the house, and the seller can ask for more money. Presumably, the amount more that they'll ask for will erase some of the savings that the buyer will realize from the lower interest rate. The mortgage payment for a 500k house at 7% is comparable to a 750k house at 3%, but the required down payment for the latter is much higher.

toomuchtodo 3y ago
Assumable mortgages are legal. You can even transfer property encumbered by a non assumable mortgage without the investor or servicer being able to accelerate or call the note under certain circumstances (for example, transfers between family members). https://lawandsteinllp.com/2023/04/garn-st-germain-act/ https://lawandsteinllp.com/2023/04/garn-st-germain-act/ (Garn–St Germain Act)
- singleshot_ 3y ago
  Most mortgages (it depends) have a clause obligating the mortgagor to live in the home, regardless of the person from whom payments originate.
  - toomuchtodo 3y ago
    Show me a US mortgage with this clause and I'll eat crow. I have never seen this in having done many subject to real estate transactions, where I'm deeded the property but the mortgage remains in someone else's name. Indeed, you can incur wrath (as this is fraud) if you apply to originate a mortgage stating it's your primary residence and then you turn around and rent it out as an investment property (you must move into the property within 60 days of closing, and after a year you can convert from owner occupied to investment property, on a primary residence note), but there is no mortgage clause to my knowledge that requires you to remain in the home yourself as long as the note exists.
    - singleshot_ 3y ago
      HUD 4000.1 governs and you’re closer to correct than I am. Pass the crow?
      - toomuchtodo 3y ago
        It’s all in good fun. Good reference!
    - SkyPuncher 3y ago
      I literally just went through this process last year. My wife is a doctor and signed a job contract 1 year out. 9 months before her start date, we stumbled on the perfect house and put an offer in. This was 1 state over. As part of the process, we had to demonstrate that the new house would be my primary residence, that we would be selling the old house when my wife’s old contract end, and that my wife actually intended to move to the new house full time. This process required an internal exception review and risk mitigation above the banks normal process (the old house was with them so we knew their mortgage process). It took a lot of time with them to convince them that we were not trying to purchase a second, vacation home - we simply bought early. If we did not sell the old house, they were going to force us to refinance as a second home or investment home. My understanding is the situation changed the federal government’s opinion of our risk and, in turn, our mortgage’a qualification for federal mortgage programs (which our bank uses to back the mortgages). If an audit occurred, the bank had to demonstrate they did not provide me with two primary residence mortgages.

toomuchtodo 3y ago

Assumable mortgages are legal. You can even transfer property encumbered by a non assumable mortgage without the investor or servicer being able to accelerate or call the note under certain circumstances (for example, transfers between family members). https://lawandsteinllp.com/2023/04/garn-st-germain-act/ https://lawandsteinllp.com/2023/04/garn-st-germain-act/ (Garn–St Germain Act)

singleshot_ 3y ago
Most mortgages (it depends) have a clause obligating the mortgagor to live in the home, regardless of the person from whom payments originate.
- toomuchtodo 3y ago
  Show me a US mortgage with this clause and I'll eat crow. I have never seen this in having done many subject to real estate transactions, where I'm deeded the property but the mortgage remains in someone else's name. Indeed, you can incur wrath (as this is fraud) if you apply to originate a mortgage stating it's your primary residence and then you turn around and rent it out as an investment property (you must move into the property within 60 days of closing, and after a year you can convert from owner occupied to investment property, on a primary residence note), but there is no mortgage clause to my knowledge that requires you to remain in the home yourself as long as the note exists.
  - singleshot_ 3y ago
    HUD 4000.1 governs and you’re closer to correct than I am. Pass the crow?
    - toomuchtodo 3y ago
      It’s all in good fun. Good reference!
  - SkyPuncher 3y ago
    I literally just went through this process last year. My wife is a doctor and signed a job contract 1 year out. 9 months before her start date, we stumbled on the perfect house and put an offer in. This was 1 state over. As part of the process, we had to demonstrate that the new house would be my primary residence, that we would be selling the old house when my wife’s old contract end, and that my wife actually intended to move to the new house full time. This process required an internal exception review and risk mitigation above the banks normal process (the old house was with them so we knew their mortgage process). It took a lot of time with them to convince them that we were not trying to purchase a second, vacation home - we simply bought early. If we did not sell the old house, they were going to force us to refinance as a second home or investment home. My understanding is the situation changed the federal government’s opinion of our risk and, in turn, our mortgage’a qualification for federal mortgage programs (which our bank uses to back the mortgages). If an audit occurred, the bank had to demonstrate they did not provide me with two primary residence mortgages.