Exploring VA Loan Assumption: Benefits and Drawbacks Unveiled

Transcript

Are you a military service member or a veteran considering buying a home with a VA loan? Well, you might be interested to know the VA loan assumption process, which allows someone else to take over your mortgage. Let’s take a closer look at the pros and cons. First, let’s talk about the benefits of loan assumption.

Major benefits is the new person can take over your loan and they can use, take the benefits of a lower interest rate. Like in the past, where rates were lower, that may make your house more sellable. So when you transfer a loan to a new borrower, they can take advantage of that lower payment and that might get you into a situation where you can sell your house much more, much more quickly, potentially make your home much more attractive.

Plus, you avoid closing costs and the fees associated with refinancing. with a VA loan assumption. However, there’s some drawbacks to consider. First, that not everyone is eligible to assume a loan. Second, the new borrower must be a qualified veteran or active duty service member. Additionally, a new borrower defaults on the loan.

The original borrower may still be held viable and it can negatively affect your credit. So, as you can see, the potential downsides of that loan assumption doesn’t release the original borrower from the liability. Unlike a traditional mortgage assumption, the original borrower may be liable. So in summary, VA loan loan assumption has its, it’s a convenient option.

It has some advantages when you’re selling your home and transferring your mortgage, but look at the pitfalls and then you can weigh your options very effectively. Hopefully this helps and thanks for watching our video. Give us a call anytime. 830 929 7100. Thanks. Have a good day.