How to Assume a Mortgage

[emilov]

Hi All,
Some of the books I've read (Robert Allen, John Burley, Wade Cook) mention as a NoMoneyDown technique that the buyer may offer to "assume" the vendor's existing mortgage i.e. take on the payments (the rest of the equity is then financed via a 2nd mortgage).

Has anyone done this? How does that work?
Do we put the mortgage in my name then? How does the bank which hold the 1st mortgage react?

Cheers,
Emil

 

[Les]

G'day Emilov,

As I understand it, this works in the US of A - but not in Australia. Part of the problem when reading US books I guess. Some good ideas, but not all are transferable,

Regards,

 

[emilov]

But what would prevent it from working here?
I mean, I'm sure the solicitor can facilitate the trasfer of the title to my name, I pay the stamp duty and that should be it.

I'll call my solicitor tomorrow about that.

Cheers,
Emmil

 

[geoffw]

I suspect that the banks just don't offer this facility.

Australian banks evaluate loans based on the lender's capacity as well as the property's value. So they look at your capacity to borrow. It's not simply a matter of transferring a mortgage over to somebody else. It's a new loan facility, with all the associated application fees and forms.

 

[beech]

hi Emilov,

Your on the right track but we cant assume mortgages here.

But we can take care of them and control the property with an option with an agreement at a later date to purchase.

All done without getting a loan.You can also assign that property before even buying and profit that way.

Keep researching(creative RE investment) as i have done over the past year and you will never look at property investment by traditional methods the same way ever again.

 

[emilov]

Hi beech,
Thanks for the advice.

Are you talking about a sandwich lease here i.e. I lease option the property and then lease option it to somebody else at a premium and keep the spread, so no banks, no rates & insurance involved?

I find that very interesting but there is just so little info about that.

Cheers,
Emil

 

[beech]

hi Emil,

In that case im talking about Sandwich Lease Options.

So many other creative methods.

Everythings on the internet,you just need to modify for Australia.

 

[Jacque]

Check out Rick Otton's stuff for more info on this- he was talking about doing this very thing in Oz recently, though I don't know how far he got....


www.webuyhouses.com.au

www.rickottononline.com.au

www.rickotton.com

Good luck learning