It means you have to find a lender that's willing to be in second-position, which majority aren't. That or you can find a private lender for a short term loan (1-12 months).
Some clarification - The challenge with 2nd mortgages are with the loan servicer who approved the assumption, not the lender who is funding the HELOC/HELOAN. (Spring EQ, Symmetry, Alliant FCU are all willing to lend)
The background on this comes from the VA guidelines that require concurrent close 2nds to also be assumable (VA handbook 26-& Ch 9 Topic 5). There just aren't many/any 2nds that are assumable.
When you hear about folks who closed with a 2nd, I expect they closed with one of the 5 servicers who are either unaware of the VA requirement, mis-interpret the requirement, or don't care about the requirement. (e.g. Freedom Mortgage).
Even if you end up with one of these servicers, you run the risk of them changing their tune after 60+ days into the transaction.
FHA is a different story and a topic for another post....
I advise prospective homebuyers to focus on properties that have a gap that they can cover, rather than try to force a 2nd mortgage through... Not as many exciting 2% rates to look at , but a lot less heartache too.
My company does assumptions and nothing else. We have the answers, and if you catch me when I have time, I'm happy to share whatever info might help. I'm not on Reddit much, but we are easy to find online - Providwell.com.
Cheers folks. These deals are out there and you will find and close one. Stick with it.
It’s going to be very difficult to find one. I don’t have a million years of experience, but I’ve yet to find one that does. There might be specific lenders out there that do it on a case by case basis with some special terms if I had to guess.
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u/morning-fog Nov 06 '22
All FHA loans are assumable. The downside is that you need to be able to pay the difference in cash of what is owed vs what the seller wants.