~Real Estate By: Reva Tidwell, Assumable Loans

How do you find out if a loan is assumable?

Look to the loan agreement to determine if it is assumable by someone else. Then talk to the lender about specific requirements based on the value of the home.

Assumable loans permit one borrower to list games for dora take over a nupro all natural dog supplement loan from another borrower without any change in the loan terms. Such loans still exist but they aren't very common or popular (for buyers) in a low-interest-rate environment. Plus, today new assumable loans are almost always adjustable rate mortgages.

"Lenders have learned that fixed rate loans with assumption clauses do not work so well," according to the "Realty Bluebook," 30th Ed., Dearborn Financial Publishing, Chicago; 1993.

Here's why: If the fixed rate is below market rate, the lender will continue to lose money if the loan is assumed. In this situation, the fixed rate assumable does not work well from the lender's point of view.

If the fixed rate is over market rate, the new buyer of a property with a fixed assumable loan won't want to assume it, assuming that he or she can qualify for market rate financing