If you assume an existing low- interest mortgage, the balance on the mortgage will usually be far less than the purchase price of the house. This means you must come up with a very large down payment unless you can get the owner to finance part of the difference.
Sometimes sellers are willing to take back a second mortgage at a below-market interest rate. I have done this on occasion with my own properties. For example: Selling price of home is $350,000 owner owes $225,000 the seller has $175,000 in equity. You make a full price offer but can only get a loan for $300,000 this is more than enough so that the seller can pay off his mortgage debt but leaves the seller $50,000 short of his asking price. You ask the seller for a $50,000 take-back mortgage and he says yes with a 5% interest payable over 15 years. You get the home you want, the seller is happy plus he is getting a monthly bonus check with interest. Everyone is happy. Just make sure you are able to pay the take-back mortgage.
Do not be afraid to ask, talk with your Realtor and let him or her speak with the seller or seller's agent on your behalf. In some home markets, this may be a doable option. In the Real Estate market you have to be flexible and creative.
I recommend you have the take-back mortgage recorded and if you have any questions talk with your realtor or title attorney.
Until next time,
Happy Home Hunting
