Shorter term and lower rate

As noted in the preceding example, an assumed loan translates into a shorter term for the buyer—without the higher payments of standard short-term loans. During times of high interest rates, assumptions can often be a gold mine of low rates.

The assumption may have a lower interest rate than currently available or, if it is an ARM loan, it has rate caps that will NOT allow the rate to increase over current rates.

Even if the loan's rate are not advantageous, remember that you will not have a full 30-year loan with an assumption, as the seller has already been making payments for a number of years.

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Real Estate 101

Real Estate 101

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