Streamline your deal qualification process for Mortgage

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[Music] on this video i'm going to discuss the  loan assumption process is becoming more and more   popular especially now that interest rates  are higher current loans could be much more   attractive to assume from a buyer so the number  one thing that we are doing as a team is making   sure that we ask every owner that's selling is  your current loan assumable it might be able   to get you a better price because there's better  interest rate financing that a buyer can assume   than the the current rates that are offered  in today's market so let's dive in here's a   couple things you need to know or think about  and do on the front end before assuming alone   we had just put together a loan assumption on a  building in orange county which sparked this video   and these are some of the things that we went  through number one we asked is what is the timing   of the loan assumption process we were told start  to finish it's going to take a total of 45 days   that's best case scenario so we want to make  sure we manage expectations on both the buyer   and the seller and to make sure that we can  execute because sometimes assumptions take a   little longer than getting a new loan number  two buyer qualifications you want to make   sure that the lender connects with the buyer  and make sure that they're qualified enough   to assume this loan the lenders want to make sure  that they're not taking on any additional risk or   just maybe the loan is with a great borrower that  has a high net worth they want to make sure that   that new buyer is is equally as strong number  three would be what are the costs to assume a   loan for this example on the chase loan the costs  are one percent prepay plus a two thousand dollar   processing fee so we got that information on the  front end we know what the costs are you want to   get that as well because you don't want to be  downstream in a deal and then not know all the   costs and then also you want to make sure that  is the existing loan amount the entire amount   that can be assumed or will the lender require  that the the loan be drawn down a little bit   to lower the amount of proceeds and here's why  sometimes a lender can do that sometimes they   didn't account for the higher property taxes  they did adjust for the property taxes to reset   if there's a sales price so there's a higher sales  price they didn't underwrite for those taxes to go   up which could cut proceeds in our example with  the chase loan we found out on the front end the   loan would go down from approximately two and  a half million down to 2.2 million so hopefully   this is some framework to get you ahead of just  a loan assumption knowing about these things on   the front end so if you're going to be buying an  apartment building with an assumption these are   some things to think about on the front end and i  think this is going to be a growing trend as rates   if they stay higher then a lot of debt was  put on in the very low three percent ranges   and those could be attractive loans to assume so  hopefully you found this of value we'll continue   to keep putting out good information thanks so  much for watching and we'll see on the next one