NBC News’ Brian Cheung reports on how some homebuyers are finding creative ways to pay for their new homes with a lower mortgage rate than they expected.
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#Mortgage #Homebuying #Economy
another 2008 in the making
Don’t think so
I cant see it!!! I literally paid pennies on the dollar for my house in 2009
How Sway?!
@@mytravls exactly, not even close.
how did 2008 happen and how is this similar?
People buying way beyond their means. SUCKER buy a house with a MORTgage M$M pushes you into believing you need. My first house I built when I was 19. My forever house I live in now on 3 acres in paradise I paid cash for.
Never a MORT gage, Mort means death. Figure it out kids.
I saved 200k living in NYC and I still can’t afford a house on a Single Income with this high interest rate…
Where/ When did you build your house first house. How much help did you have from family at 19?
@@cutthechicken194 probably is some run down hick town full of crack heads
@@cutthechicken194he’s either a liar OR gatekeeping information
@@cutthechicken194 I left home at 17, I didn’t have anything from “family” other than the SKILLS I need and the KNOWLEDGE I needed to build a house.
Where and when matters not. I built a house during the pandemic too. I don’t make excuses, I make houses.
That’s a loss for the lendor. 🤔
Not really. If the house sold without the assumption, the lender would no longer have the mortgage which means they lose the profit from it.
who cares they’re greedy anyway
Education is soooo bad I us… The lender has the SAME loan with same terms.. its just a different person paying.. “Assumable loan”.. how is this a loss for lender….
@@daintyminnie9270 it is cause the lender could be making more money if they did a new loan term for the new buyers at todays rates
@@daintyminnie9270 I think he meant “loss” as in they could’ve slapped on a 7% mortgage rate opposed to the 3% rate for the new home buyers, so it was a lost “opportunity”. But assumable loans seems to be mostly available for VA and FHA loans, which are more govt backed, so they aren’t necessarily in it for the profit. Reason why, as the reporter stated, this isn’t an option for conventional loans because all they want is profits lol.
Why would anyone give them the loan of the house is worth double now 😂😂
Creative Ways!
Nah there has to be a loop hole
what do you think the loop hole is?
I think it is you have to pay the equity the house has up front. So you would need to have some cash saved.
Not loop holes per se, but it is limited.
You have to be able to pay up front for the equity the homeowner has already built up instead of a down payment per se.
So if they have $300k in equity, you need to have $300k to start. You are taking over their loan, which means you have to pay for what they have already paid. As a result, this generally only works well for a new buyer if it is a somewhat recent purchase for the current owner. In this case, it was apparently only a few years (just before the rates started going up).
You need it to be far enough back that the rate is much better, but not so far back that there is a LOT of equity and the upfront cost is too high…
The other tricky part is, you need to qualify for their loan. So it is up to the bank who currently holds the mortgage to qualify you to assume it.
And as they mentioned, most loans are NOT assumable, so this type of opportunity won’t happen very often.
But as a new homebuyer, you should definitely be seeing whether or not it is an option…
Unlikely, but if there and you can afford it, it could save a huge amount.
Vivica Fox was married for a few years. This would be here 2nd marriage if it were to happen.
What does this have to do with vivica fox!?
Nothing, but she’s beautiful and confident 😂 It was a nice insert.
Vivica is great actress but she’s worth $12 million she shouldn’t have no issues getting a man or buying a home but I don’t what she has to do with the video.
Vivica Fox use to be vegan for a period of time. but changed diet to mediterean due to pre-diabetic concerns. She is I think better now
@@mia1shooter everything.. pay attention to news
squatters
Make sense
Owners…. sounds like Red lining mindsets here… we know what that is REALLY about
What they dont tell you is the fine print…. I.E. If you assume the mortgage whats the difference in price between the assumable and the the sale price (if the mortgage is 300k at 3.5% but the seller is selling the house for 500k where is the other 200k coming from?) and they said they didnt get another mortgage so…. they just had 200k sitting around in cash? or is the Seller underwater already that the original mortgage at 300k is the most they will get for the house? In this scenario the seller barely had any equity so the out of pocket cost to them is small but thats rarely the case for most people…. and if they only lived there 1 year and selling it again thats telling of handing the bag to someone else before a downturn.
they literally said this in the story and addressed how they were able to do so because the previous owner hadn’t built up much equity…… Ppl keep saying downturn and over any LONG TERM period, home prices go up, again LONG TERM. Generational mindset is different than now mindset….
Assuming the difference makes up for closing costs, it’s better to have a chunk at a lower rate than to have the whole thing at a high rate.
@@JB_Hobbies oh i totally agree with you but the problem in my eyes lies with the mortgage. If you assume the 1st mortgage and dont have enough cash for the difference, i would be hard pressed to find another lender to cover the difference because they would be second lien which a lot dont like to do unless its a heloc… but cant do that because you dont own the home yet.
@@Teknomanslade2 Ah, I see what you are saying. Yes, well, that assumption strategy really only works if the original lender is also willing to do a new loan for the difference, and I assume that the lender would also require a downpayment in at least the same amount as it would require for new financing covering the entire balance.
@@JB_Hobbies pretty sure buyer needs to pay the difference to the seller up front at closing. 200k down paid directly to seller. Seller now out of the equation now buyer assumes the remaining loan. Not sure just assuming that’s how it works.
Very creative and truly worth it if you have the equity built into the house.
A lot of people think the mortgage rate is the only major factor to consider when buying/owning a home, but dont forget the property tax. That can fluctuate as well arbitrarily. They can “appraise”/value your home based on market conditions and that could increase your property tax significantly and put you deep in a hole as much as the mortgage rate can if not more. This system is not for you.
my taxes/appraisal value has not double in 20 years Nassau County LI – meanwhile rates/mortgage payments doubled in 2 years – dont think the hole is as big as you think…
@@thepawns3835 lol I had to Google Nassau county LI. Surprised to find you’re talking about long island. I would’ve thought property taxes would’ve increased there. But Google also seems to support your claim. Looks like they have republican legislators there that prevented any increases in property taxes for at least the last 14 years. That’s pretty good for you guys. Congrats. Maybe I should move down there.
Lol my bad. I also forgot to mention home owners insurance. Your homeowners insurance might increase if they feel the “value” of your home increases for whatever reason. So there’s that too. Basically there’s always something to pay for and for the rest of your life.
Yea my property taxes were reassessed randomly and my escrow payments went up by $600. It’s a good thing I had the salary for it because it would have ruined someone else.
Basically I got a rate at a certain price knowing I could double down up front and got a locked in rate.
Great if the owner kept up with property taxes if not you become responsible for the back pay for the mortgage.
Oh I totally didn’t think of that 🤔. Good point.
Most likely, the taxes and insurance were already included (escrowed) with the monthly payment as this is a requirement with most lenders and I’m sure a title/land search was done as well before signing docs.
Taxes are included in mortgage payments
If there was a tax lien on the house, they wouldn’t be able to sell it?
when that rate expires be ready for it to double
I would hope that isn’t an ARM mortgage.
I don’t personally know why anyone would get a mortgage with a rate that expires. That would freak me out.
@@desiv1170 when you get a 5 fixed mortgage this is what you agree to
I am happy for them.
In my country morgages are around 10-11% although its fix for the entire loan.
I would look for recently flipped properties bought in 2020 (with the right loan of course) and little to no equity built in the property. The key is a great realtor to find these properties.
Im happy for this couple and their family ❤
The government is going to ban this soon😂😂
No they won’t
No they won’t. Assumable mortgages are nothing new.
That’s nothing new lol
This administration is culpable of anything you thought wasn’t possible 😂
It’s been there 4 ever
Great to hear about a realtor that understands creative strategies! There could be opportunity for so many sellers to sell if more agents would learn about legal creative strategies to purchase. Getting a home loan directly through the bank isn’t the ONLY way to purchase a home!
00
Interest rates are NOT out of control. If you compare historically, they are about where they always have been. It’s just that they have been so low for so long, many young people haven’t seen rates this high so they think they are out of control. In the late 70s and early 80s they were like 15% so 7% is pretty normal.
The big difference is houses today cost more than double what they did back then when adjusted for inflation. Houses were more affordable with a 15% interest rate back then versus a 7% interest rate now.
Never thought about this. Congrats to everyone who can take an advantage of this.
That’s amazing!
I like the house market when the rates are at 13% or 16%. SEE LOWER INTEREST RATES ALLOWS WALL STREET TO BUY UP ALL HOUSES AT 2 TO 3 TIMES MORE THAN THE ACTUAL VALUE OF THE HOUSE. WALL STREET IS USING FREE MONEY AND THEY DON’T CARE IF EVERYTHING FAILS BECAUSE AT THE END IT’S ALL TAX PAYERS MONEY.
TODAY THE LARGEST SCAM IN USA HISTORY IT’S HAPPENING IN THE HOUSE MARKET
“till that mortgage rate goes up”? what do you mean? mortgages dont change
She’s probably speaking on a fluctuating mortgage. 3,2,1 is perhaps what’s she is mentioning I assume.
This News story failed to mention when the assumed mortgage comes due for renewal. Do the new owners understand that the 3% rate is only temporary and that they will be in for a shocking surprise in the not-too-distant future?
Mortgages don’t renew lol. This is not insurance
@@DanielRicany … Mortgage terms definitely do renew, terms can be 10yr, 15yr, 20yr, 25yr, 30yr, etc. Haven’t you heard that recently many home owners have lost their homes due to foreclosure due to their mortgage term renewing, which means that the current rate of interest will be applied (which is often much higher than the previous term’s interest rate). This has caused a lot of home owners to lose their homes because they are unable to keep up with the much higher mortgage payments caused by the increased interest rates that occurred when the mortgage term ended and was renewed. There are plenty of YouTube videos about this topic.
@@galefraneythis doesn’t apply to 30 year fixed rate, correct
Okay, stupid video. Can you explain how it works.
For instance, we take a 400K home at 2.5% interest rate and paid $80k down payment to avoid PMI.
After 2 years let’s ASSUME I STILL HAVE $300k loan but the the property appreciated and the home I’m selling for $700k.
Please explain how this works.
chatGPT answered:
After making payments for 3 years (36 months) on a $320,000 mortgage at 2.5% interest, the remaining balance would be approximately $297,679.
### Updated Scenario
– **Remaining Loan Balance after 3 Years:** $297,679
– **Home Value after Appreciation:** $700,000
– **Difference to be Covered by Buyer:** $700,000 (sale price) – $297,679 (assumed loan) = $402,321
### How the Assumable Mortgage Works in Your Updated Case
1. **Selling the Home with the Assumable Mortgage:**
– You decide to sell your home for $700,000.
– The remaining loan balance is $297,679 with a 2.5% interest rate.
2. **Buyer Takes Over the Loan:**
– The buyer assumes your mortgage with the remaining balance of $297,679 at the 2.5% interest rate.
– The buyer must qualify for the mortgage with the lender’s criteria.
3. **Handling the Difference in Sale Price and Loan Balance:**
– The buyer needs to pay the difference between the sale price and the assumed loan balance.
– The buyer would need to come up with $402,321 in cash or secure another loan for this amount.
### Benefits and Considerations
– **Lower Interest Rate for Buyer:** The buyer benefits from assuming a lower interest rate mortgage.
– **Attractive Selling Point:** Offering an assumable mortgage can make your property more attractive.
– **Lender Approval:** The lender must approve the assumption.
– **Assumption Fees:** There may be fees associated with the assumption process.
This setup can make your property more appealing, especially in an environment where current mortgage rates are higher than your original rate. If you have more specific questions or scenarios, feel free to ask!
Love it. This could help a lot of ppl if they can handle the upfront costs.
Supposed the Government hasn’t banned this too… they want you to own nothing & be a renter forever…
I’m glad at the end they mentioned that assumable mortgages are not advised if the owner has a lot of equity. Why you may ask? Because you have to pay the difference as your down payment.
So if they’ve been in their house for say 10 years and paid off 120k in principal, now the buyer has to put up 120k themselves if I understand that right. Does the buyer also have to put in a new down payment and repay closing costs? I assume so as well.
@@MrNightpwner correct for the first part and no for the second part in regards to paying an additional down payment. The difference the buyer pays is the new down payment. Yes, they do need to pay the closing costs as well.
@@joelpicolo7306 question. I have a fha loan 4% 200k. House has appreciated worth about 450k now. So over 200k equity. If I listed it for 550k using this method the buyer would be paying 100k over and need to have over 200k up front but the 3% loan difference will save them well over that 100k in interest for the life of the loan. Do you think this is something that would actually work for both parties or am I missing something? Thank you for any advice and knowledge in advance
@@MrNightpwner more simply explained, the buyer has to cover the difference between the purchase price – loan balance. You’re forgetting about the appreciation over the ten years.
Buy in cash
I’m hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2025. As a backup plan, I’ve been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
Investing in real estate and stocks might be a wise choice, particularly if you have a sound trading plan that can get you through profitable days.
You’re not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
@@HRMColoniallifeinsurance Recently, I’ve been considering the possibility of speaking with consultants. I need guidance because I’m an adult, but I’m not sure if their services would be all that helpful.
My CFA, Desiree Ruth Hoffman, is a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thank you for this tip. I must say, Desiree appears to be quite knowledgeable. After coming across her online page, I thoroughly went through her resume, and I must say, it was quite impressive. I reached out to her, and I have booked a session with her.
I’m chilling. No, mortgage, just chilling
No ambition keep chilling
@@mgaraujo1220 yeah, section 8, your dollars are arriving in this ebt card that i use for food. 🤣
Living the life by jus chillin’😂😞
There should be different tiers for first time home owners interest rates, we shouldn’t be competing with multi-billion dollar companies for first time homes.
Thanks for telling everyone lol
Very happy for this family!!!
This is the only way I’d buy house today
So what happens if the new owner defaults because he is she is out of work for say 6-9 mths ?
The old owner got their equity back and is off the hook?
This works if old owner did not have large equity in house because the new owner has to give old owner cash for that equity .
If old owner had large equity , chances are young couple don’t have that kind of capital to pay the old owner .
75% mortgages out there not eligible for this set up said newscaster . It’s not going to be easy to find a match of buyer, seller and banks would are doing their due diligence on the deal.
Lots more legal work to be done and higher closing costs.
Funny how these same people didn’t go out and buy a home when interest rates were 3%. Oh right, the over bidding was insane. 😆
So tired of tic tok being referenced in “journalism”
Well news is news. I go tell a buddy something I heard in person that’s news. Tik tok only streamlines it. No I don’t use Tik tok
Pay cash. If you can’t afford it, it’s simply out of your means. Not every 20 and 30 year old should be a homeowner; it’s simply unsustainable and unrealistic. I suspect the ever increasing mortgage and car loan defaults and credit card balances will lead to a credit crisis, housing market collapse and economic recession in the next few years. And of course, hardly anyone will learn from that.
the average person now buys the type of home a factory owner would have lived in in the 1950s
There aren’t many of those loans out there like this. Also the seller has equity who is paying for that? Their not telling the whole story!!!
You have to pay the difference or equity. You heard that they only made payments for a year and a half. They didn’t pay down much and house likely didn’t appreciate much. Not much equity or difference in the loan vs value.
Awesomeeeeeeeee! Chris will have another helper assisting him soon. 🙂
*The corruption that runs through this administration is getting scarier. I feel sympathy for people with disabilities not getting the help they deserve. Imagine investing $1000 and receiving $4,200.*
Getting Yetta Cox to help me really helped me clear all my debts. I started with what I have left and it’s been the best decision I ever made.
I remember giving her my first savings $1500 and she opened a brokerage account for me it turned out to be the best thing that ever happened to me..
Exactly, get the app installed and search her up using the name above, make sure there’s no added letter or number.
Aware scams
It’s not the rate it’s the price people
Not as easy as it seems. Longer closing time and you need to pay the equity difference in cash.
But 2 or 3% lower interest saves you 100-500k over the life of the loan.
dont forget to tell them that if they default on the loan the original borrower is still liable…..
Not true, it’s similar to normal housing process. The buyer just needs to payoff the existing equity and closing cost. The vested owner will not be on the deed or mortgage and new buyer is now on the loan.
All is it the buyer gets the house at the equity % and the interest rate. It’s a good deal if your able to find a property and the owner is willing to do an assumption loan.
@@Inyuasha824 its 100% true dude dont belive me go talk to a lender. The seller can still be responsible for the debt, even after the buyer assumes the loan, if the lender does not release the original borrower
it could be a risk to the seller because they won’t be free and clear if the buyer can’t make the payments
When the buyer assumes the mortgage he takes over everything, it’s just like a normal home sale. The seller doesn’t not own the asset or the mortgage liability.
Wow, that’s awesome.
Good for them!
make all conventional loans (temporarily) assumable for first time home buyers.
It’s called a fixed rate so it stays the same lol every month
They’re gonna lose the house when they’ll have to renew at 7.5%
Why would they have to refinance?
@@waynepetersen9082 Not refinancing but renew their interest rate. You can’t keep the same rate forever, that’s why we renew every 3-4 or 5 years. And once they renew they’ll have to pay with the current rate which is really high so their monthly payment will change as well. I hope for them they’ll be able to cover it. If they can’t they won’t have a choice to sell quickly
Vote Biden and dems out they are destroying our country, face it Biden is a terrible president
lol
Stop with your nonsense .
Is there a cult meeting tonight?
You heard that right. Now I can get away with being Delinquent on my Mortgage by just passing the Debt onto you before the Real Estate dramatically Deprecates in value.
Yeah this isn’t going to last long 😂
If the sellers jsut want to rent or downgrade this works. If not, who would want to give up their mortgage for a higher rate
They failed to mention that if new buyer default on the loan, seller is still liable.
Which is why this is extremely rare. If I’m the owner of this house and sell this way – I LOST
Not true on VA loans. Its two parts. One is the mortgage and two is the VA guarantee. Any buyer can assume a VA mortgage, and the buyer is responsible to pay that mortgage, period, end stop. If that buyer defaults, the seller is not on the hook financially for that mortgage. What is on the hook is the VA guarantee. The seller may not get their VA loan benefit restored until that mortgage is paid off. However, if the seller sells to another person who has and will use their VA loan benefit to fully assume the mortgage (part 1+2), the seller is not responsible for the mortgage and can immediately petition to get their VA loan benefit restored and available to make another VA home purchase. In no case is the seller liable for the buyer defaulting on the mortgage.
This ia the type of info you *DO NOT* put on National TV for the government to shut down
It’s been around a long time, it’s nothing new. Government already knows about it and actually allows you to find houses that are more eligible on your county website
Nice that dude is worth hiring. He knows his stuff
This is a nightmare waiting to explode!!!
There is also seller financing where the seller themselves act as the bank.
I have heard of this. The problem is that a person that wants to move has to try and find a house that is eligible.
Very happy for the second half of the video. It’s not nearly this simple and they explained it well in a short time.
Youre mortgage oayment only goes up if its not fixed. Why wouldnt you get a fixed mortgage?
It is fixed. It’s a government loan they are assuming.
It’s crazy how like al blk women are obese
This is very rare, only a few hundred available per year
Good ole Johnny sins is a real estate agent now
Something to know is that the seller is still on the hook if the buyer defaults. Also, I know for VA sellers, they will not have their entitlement restored unless they sell to another VA buyer. Meaning, they can’t use the VA loan on their next purchase in most cases to non VA people. So good luck getting a seller to agree to that.
There is nothing creative about this. It’s just getting people to pay the maximum price possible for a home that will be worth far less over the coming years. But if you have ever had a VA loan, you would already know this is an option as VA loans are assumable. The most ideal buyer is one who is will use their own VA loan benefit to fully assume the mortgage (the mortgage itself and the VA guarantee) and the seller not only gets out of the mortgage but can also get their VA loan benefit restored. That is not actually required. It is possible to sell to non-VA loan benefit holder and the mortgage is assumed by the buyer, but the seller cannot get their benefit restored until that loan is paid off. If that buyer were to default, it does not mean the seller is “on the hook” for the mortgage. It just means you may have trouble getting your benefit restored. That seller is not actually financially liable for the buyer defaulting down the road.
Just what i needed to know
The government is against anyone making a way for themselves.
It’s sad that ppl have to resort to this in order to have a decent life. But either way, good for them. 😊
Voting Biden out will be a creative way to lower my mortgage rate!
You assume a low mortgage but you got to get a second mortgage to cover the difference in the equity/listing price. Now you have two mortgage 🤔
Smart idea!
That chick talking in the car has no idea how a mortgage works, so she acts like it’s smart to rent.
Is that a HUD house? Did they get 50,000 for pay down from government?
Only fans to pay property tax? 😂
You know if this a thing in the next couple years the market finna collapse hard.
Guys to do an assumable mortgage. You would have to pay the difference in equity.. meaning if there mortgage is 400,000 and they are selling you the house for $500,000 you are responsible to pay that $100,000
So it’s bs for 77% of buyers