Search for sellers with lowequity assumables loans

You've already seen (Secret #20) that in periods of relatively high interest rates, you can slash your costs of financing by assuming a mortgage that carries a below-market interest rate. In addition, assumables sometimes require little or nothing down. Just locate a seller who has bought (or refinanced) recently with a low-down, high-LTV, FHA/VA (or otherwise assumable) mortgage. Within the past three or four years, FHA and VA have originated more than a million low- and nothing-down mortgages.

Because the original loan balances often include closing costs and fees, many such buyers (now sellers) have built little equity. You can probably assume their loan for less than 10 percent cash out of pocket. In cases where sellers have accumulated substantial equity, ask for a seller second, or arrange a second mortgage through a mortgage lender (Secret #68). You might also create a wraparound loan (Secret #73).

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