By: Darrell Castle
What is a non-qualifying assumable loan? If you’ve filed bankruptcy, is a loan like this a good option for buying a house? How would you find a non-qualifying assumable loan?
In this video, Memphis bankruptcy attorney Darrell Castle answers your questions about these loans and how they might affect your life after bankruptcy.
A non-qualifying assumable loan is a mortgage – usually – that a person has, and that person wants to sell his or her house. And he happens to hold a mortgage on that house that is assumable. In other words, you as the potential buyer do not have to meet any particular credit standards in order to buy that house. All you have to do is take over this person’s mortgage.
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Now, the person who has the mortgage probably has some equity in the home, which he might want you to pay him. You know, there might be a down payment that he would ask from you. But then you would just assume his loan, and you wouldn’t have to meet any credit standard in order to do that.
So if a person had filed for bankruptcy let’s say, and he got a discharge in Chapter 7, meaning all of his unsecured debts and so forth are discharged, he could start scanning the newspapers in his local community – I know here in Memphis, our newspaper usually carries several ads on Sunday for non-qualifying assumable deals. And you look through there and find one that looks interesting and call the person and see if you can work it out.
If you just came out of Chapter 7 you might have to save the equity that the seller would want from you, but other than that, that’s a good way to get in a home rather quickly.