Here are some guidelines and advice:

• Calculate the APR (Annual Percentage Rate) of the mortgage to be assumed. In many cases the lender will ask for “points” from the person assuming the mortgage. Make sure these points are figured into the APR. Don’t look at just the interest rate. Add the interest points to it and calculate the APR.

• Make sure you can afford the monthly payment. Everything else being equal, an assumed mortgage will have a higher monthly payment amount than a new 30 year mortgage. If you can afford the payment, this may be a good option for you.

• When assuming a home mortgage, no property appraisal is required. This will save time and money for the borrower.

If I Assume A Mortgage, Can It Be Assumed Again?

Generally, yes. Any mortgage you assume can again be assumed by someone purchasing your home from you. Bear in mind that as the life of the loan shortens, the attraction of assumption decreases. This occurs because the principal balance of the loan lessens every year.

For example, a 30 year mortgage with a beginning principal balance of $300,000 has a principal balance of only $190,000 at the end of 15 years.

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