Kindly_Boysenberry_7 OP t1_iu5dtz9 wrote on October 28, 2022 at 5:52 PM

Reply to comment by TryNo9404 in RVA Real Estate AMA - "What The H*ll Is Happening?" Edition by Kindly_Boysenberry_7

Well there is a saying in the real estate/mortgage world - "Marry the house, date the rate."

I don't necessarily think ARMs are too risky, but like everything else, it depends on your specific circumstances. Right now they are a much better option than the 30-year fixed rate. I had clients close yesterday with 5.75% on jumbo money on a 7/1 ARM, which looked great compared to some of the rates I've seen lately.

TBH, I've been doing only fixed rate 30-year mortgages for so long now, I am going to have to completely reeducate myself on creative financing options. You should be getting guidance from a good mortgage lender who will help you understand all the options and choose the right one based on your circumstance. If the lender won't take the time so you feel fully educated on the process and your choices, you need another lender.

Also, people don't seem to be talking about assumptions right now, and I'm not sure why. An assumption lets you step into the shoes of the current mortgage holder and take over their loan at their rate. I just don't know enough about assumptions right now to give good advice, but you should at least raise it with your lender.

gracetw22 t1_iu6pn84 wrote on October 28, 2022 at 11:36 PM

Problem with an assumption is they take 90ish days, has to be an FHA or VA loan currently, and you have to bring cash for the difference. I think it would have to be a much stronger buyers market for sellers to be willing to wait that long to get their house sold.

Kindly_Boysenberry_7 OP t1_iu6rpr3 wrote on October 28, 2022 at 11:53 PM

Good to know. I need to take you to lunch next week so you can educate me about lending options. I swear I've only done 30 year fixed conventional and some FHA, maybe a VA loan or two over the last 14 years!

Laura37733 t1_iu78wxm wrote on October 29, 2022 at 2:14 AM

It can be less time. I originate assumptions and my bank is closing in 35-45 days barring any crazy hiccups as long as we have responsive borrowers. That being said, we're taking more and more assumption apps and have only one underwriter on government assumptions currently so that could certainly slow down.

Also - adjustable rate loans out of their fixed period are technically also assumable, but those are certainly less attractive in this environment.

The extra cash thing is a huge downside - it's definitely a niche product and not for everyone.

gracetw22 t1_iu8opur wrote on October 29, 2022 at 12:44 PM

Is that from when they first call or when they get to you? I have heard most people have 30 days from initial request to when they can get to someone to take the application.

Laura37733 t1_iu8stog wrote on October 29, 2022 at 1:22 PM

Good point - and I know my bank is lacking in that side of things and a lot of the customer service side doesn't seem to know assumptions exist or how to get to one of the LOs who work them. And of course, the buyer has to work with the current servicer so that could be a delay. The closed assumption deals I've worked, for the most part, the seller reaches out to the bank as they are listing and I give them my direct info for a buyer to reach me so they don't run into trouble. I have no idea how many potentially assumable loans wound up just being a normal purchase because no one could find my team.

gracetw22 t1_iu8uwms wrote on October 29, 2022 at 1:40 PM

Yes I forget which bank it was but someone said it took a month of calling customer service to get even transferred to someone who knew what they were talking about and then that person said the first application appointment would be in 35 days, and 60 day processing time. Yikes. I do think they’re a great option for transactions between family members, divorce, things like that where there isn’t quite as much of a timeline. There’s just a ton of agents out there talking about “mortgage lenders don’t want you to know this ONE TRICK” on Facebook and it’s not quite so simple all the time. Good info that some servicers aren’t as much of a mess though. I helped a client with one back in the day where he needed a co signer and then assumed the loan to get his dad off and I am 100% sure the delays with his servicer were on his end with turning in documents lol