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Valued Member
maryellis1981
Posts: 33
Registered: ‎04-12-2011

Is this a realistic option?

Hi Everyone,

 

I have posted a couple of times before but here is a quick background.  I sold my previous home through a short sale due to my divorce in 2010.  I have since then let my credit score recover and I am currently at 710-712 according TU, EXP and EQ.  The LO at my local bank has indicated that I should be eligible for a new mortgage 2 years after my short sale, Novemeber 2012 so long as I have a 10% down-payment.

 

So here's my current situation... I might have found the perfect house.  I have an appointment this weekend to go take a look at it.  It has everything I'm looking for and the price is right.   My mother has mentioned possibly purchasing the house herself and then have me assume the mortgage after November when I can get approved.  Is this a realistic option?  Has anyone assumed a mortgage before?  Is it a tough to a bank to approve such a situation?

 

Thanks in advance for the advice!

Senior Contributor
Booner72
Posts: 3,889
Registered: ‎05-24-2011

Re: Is this a realistic option?

I wouldn't even tell the bank that is the plan. I'd just have my mom get the loan, and then qualify and assume in November...
STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009

Re: Is this a realistic option?

I don't think all loans are assumable, so make sure you look at a loan program that allows for assumption.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Valued Member
maryellis1981
Posts: 33
Registered: ‎04-12-2011

Re: Is this a realistic option?

Great!  So if my mother is going to her local bank for the mortgage should she ask the LO if the loan is assumable at that point?  Is it common for loans to not be assumable?  Or are most loans assumable?  I have no doubt that she wouldn't be able to qualify.  Between her and my father their retirement income is well over six figures, their credit scores are fantastic and their own home is paid for.

 

Not sure if it matters or not but I would be looking to assume the mortgage by the end of the year.

Regular Contributor
K_J
Posts: 209
Registered: ‎01-31-2012

Re: Is this a realistic option?

If your short sale was in 2010, I would think you couldn't buy till 2013, someone correct me if I am wrong.


Starting Score: EQ: 532, EX: 569, TU: 621 (All lender pull 10/15/11)
Current Score: EQ: 660,lender pull 4/13, EX: 671 lender pull 4/13, TU: 691 lender pull (4/13)
Goal Score: 700


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Valued Member
maryellis1981
Posts: 33
Registered: ‎04-12-2011

Re: Is this a realistic option?

The LO at my bank and another LO a mortgage company through a local credit union both told me I would be qualified for a conventional mortgage with 10% down-payment.  My short sale only had a 60 day late and my credit scores are already in the low 700's.  

Valued Member
maryellis1981
Posts: 33
Registered: ‎04-12-2011

Re: Is this a realistic option?

Other than the lates prior to my short sale is flawless.

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009

Re: Is this a realistic option?


maryellis1981 wrote:

Great!  So if my mother is going to her local bank for the mortgage should she ask the LO if the loan is assumable at that point?  Is it common for loans to not be assumable?  Or are most loans assumable?  I have no doubt that she wouldn't be able to qualify.  Between her and my father their retirement income is well over six figures, their credit scores are fantastic and their own home is paid for.

 

Not sure if it matters or not but I would be looking to assume the mortgage by the end of the year.


My (limited) understanding is that most conventional loans are not assumable.  FHA loans are assumable.  I don't know about other loan programs. 

 

I don't think it would be odd for your mother to ask the LO.  Having a mortgage that is assumable can be a selling point, so it would be natural for her to want to know whether that is an option for when she wants to sell the house.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Valued Member
maryellis1981
Posts: 33
Registered: ‎04-12-2011

Re: Is this a realistic option?

So the home I was interested in went under contract today.  Boo!  But my mother and I are scheduling an appointment next with the local bank to see what the options are (if any).  Thank you everyone the responses!

New Member
onceuponan803
Posts: 9
Registered: ‎05-25-2012

Re: Is this a realistic option?

I have just encountered a short sale situation where the seller (borrower) had NO late payments, did the short sale, and qualifed for a new home loan almost immediately.  

That said, almost no loans are assumable these days.  You could, however, pay your mom directly.  She could add you to the home's title.   You could also do a 'wrap" or "all inclusive trust deed" and leave the loan in place (again, you pay your mom and she pays the bank mortgage).  


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