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Assuming an Existing FHA Loan

Most mortgages have a requirement that the loan must be paid in full when the property is sold. However, FHA offers a different option to the seller and buyer. It is possible for the buyer to take over the existing FHA mortgage from the current property owner. This is a very enticing offer for someone that has a mortgage with a great interest rate. Here are the guidelines for an assumable FHA mortgage.

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Review Existing Loan

The first thing you should do as a potential buyer is review the existing loan documents. Any loan that originated prior to December 1 in 1986 is allowed to go through a “simple assumption” procedure. This means the buyer does not have to qualify for the FHA mortgage. For loans that were originated on after the December date, the buyer will have to qualify for the loan just like any new borrower.

Negotiate a Price with the Seller

Most sellers would like to receive a large part of the equity they paid in to the mortgage over the years since they originated the loan. The price you can negotiate is really dependent on your ability to deal and the seller’s motivation for getting rid of the home. One thing that must be clear; the buyout amount given from buyer to seller cannot be financed in to the existing FHA mortgage. This is money that needs to be paid either in cash or with a loan separate from the mortgage.

It may be possible to convince the seller to finance the buyout amount. This would mean that you have two loans to repay in order to purchase the home.

Talk to a Mortgage Lender

Since you will likely have to qualify for an FHA mortgage loan, it is advisable to talk to a lender experienced with FHA loans. The lender can review your credit file, determine your monthly income per FHA guidelines and find out if you qualify for the loan.

Determine Current Loan Status

You need to find out if the current property owner is up to date on their mortgage payments. If there are any late payments, those payments are transferred to the new buyer. This can be rectified by either paying the amount necessary to get current or requesting a modification of the loan.

Inquire About Down Payment

Since FHA asks for a down payment equal to 3.5% of the price, this rule will apply to someone assuming the loan. In this case, the 3.5% is based on the existing loan balance.

If you are approved for the loan, you may proceed with the closing process. You should ask the lender to contact a local title agency to research the title to ensure there are no liens on the property other than the FHA mortgage. Additional liens will have to be paid in order to transfer the deed in to your name as owner.

As a young child, like most children are, I had a tendency to be arrogant, boastful, selfish and ego centric. I don't guess in this respect I was really any different than my peers however, it was only when I became more self aware, more able to analyze myself in a more retrospective fashion that I was able to see these traits and decide to do something about them. In my opinion, all of these traits are the least desirable of my personality and as such, I made a decision to negate their influence in my life as much as possible. For those of you who know me well, you know that in many aspects, my decision was made for me and my steering of my personality was subject in a great measure by my circumstances of which, were beyond my control. None the less, as with all of us, life takes its role as the developer of the strong and the destroyer of the weak and I found myself rising to the occasion, molding myself through my mentors, my peers, my family and my faith. I remember the day however, can't remember the exact date but can recall the location, and circumstances when I decided that a humble life, a life in which I stand before my belief system naked, prepared to be constantly judged, was a life I would pursue. You see, for me, such a life, where I am transparent and those who know me, or do business with me will not be filtered from my free thought and likewise, they could be honest and forth right with me, was a life where my associations would be my judgment and others could make a truthful decision on as to my intentions......this was a life of constant humility.

In this business, I have learned a all encompassing truth and that is, humility will serve you well. In fact, humility has been the catapult in which my career has stood and through humility, I hope to see career heights that I have only dreamed of. In this way, my life and decision has been a constant state of irony. This has caused in me a struggle....a battle between wills. In one aspect, my ego rises and I look at the trappings of success and my brains tells me that I deserve these rewards, I have worked hard for these rewards, I should take these rewards. Yes, maybe these thoughts are true, maybe in these moments of conflict I find the honesty of my nature however, it's not the life I decided to pursue so long ago. Life in this way can be cruel however, as I have learned, it's in the cruelty of life that we are a truly remarkable people....it's the cruelty of life where we find ourselves triumphant and victorious and it's the irony of life that we find, without such conflict, without such hardship, we would never know the glory of our abilities, when they are set to stand eye to eye with transgression.

Now, more specifically to the issue at hand. Here recently I was contacted by a man who felt I had participated in a wrong against him. He felt as if a promise was made and not fulfilled. In this, he was enraged, angry, bitter, and filled with vitriol that overflowed from his email and made my nose curl in disgust and had my eyes squint with disdain. You see, my role in this perceived  wrong was limited and actually could be logically argued that I had no role for I had no authority in the matter yet, blinded by his own paradigm, he was unable to coherently understand any intelligent argument as to such. Ultimately, those he accused with such fervor rallied the troops, circled the wagons and battle lines were drawn. Granted, the situation hasn't played out to completion however, my experience with this man has been as Epic as Odyssey and just as incomplete so, I expect that my day may come to be measured in it's success by how many times I am having to spend in quelling the fire of his bitter criticism and here we have our lesson.

After a brief discussion with those accused, it was apparent to me that had the man come humble and prepared to request Justice, it would have been well received and Justice would have been delivered in full favor of the accuser. Instead, this man came overwhelmed and out of self control, slinging accusations and making false assumptions that turned favor from him. His actions compelled those he accused to throw their hands up in self defense rather than throw their hands up in submission to his claim. Here is the meat of the lesson and that is, it's human nature to repel bitterness and likewise it's human nature to embrace humility. Had the man come, humble, appreciative, and accepting, his desire would have been satisfied and possibly even been quenched beyond his simple request.

Sadly enough, my experience is that even now, this man has not within him the ability to approach the situation with caution and instead, he will come out guns a blazing to his own folly.

I had heard growing up, it's always easier to catch a bee with honey than it is with vinegar......and, in the back of my mind, I always thought to myself, who would ever try to catch a bee with vinegar......I guess now I know.