Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
Though assumable loans have a number of advantages over new loans, there are a few disadvantages to them as well. Before jumping into an assumable loan, it is important to recognize these three drawbacks.
The due date of the loan isn't going to change. If the payment is due on the 12th and you assume the loan on the 9th, you have three days (not factoring in any grace period, if one is available) to make the full payment on the loan. New loans generally allow 45 days before the first payment is due because of the down payment.
The interest rate isn't going to change, which means it could be much higher than the current market interest rates. This means that you could pay more money than if you had a brand new loan.
To be able to assume a loan, your credit and income must be reviewed. You may have trouble getting a bank to allow you to assume a loan. It is generally easier than qualifying for a new loan, but may still be difficult for many borrowers with bad credit.
- Appraisal Basics
- FHA Eligibility with Bankruptcy and Foreclosure
- Second Mortgages: Advantages and Disadvantages
- 3 Factors that Can Negatively Affect Your Mortgage Application
- Home Equity Loans for People with Bad Credit
- What Lenders Don't Reveal About Home Equity Loans
- FHA Loans for a First-Time Home Buyer
- Low Down Payment Loan Qualification
- How to Get Approved for an FHA Loan despite Bad Credit