assumable mortage????

[tanyabrown9]

Hello, We recently moved to Mississippi, and were scheduled to close on a new home the same day Katrina hit the state. The original lenders placed moritoriums on all loans in the 3 affected states, due to the "state of disater" declaration made by FEMA. We Spent our $11,000.00 down payment/closing costs living in hotels for months with our four children including a five week old baby, waiting indefinetly for the moritorium to be lifted. We already put down a deposit, paid for a home inspection, and the appraisal. The home was undamaged in everway but the lenders were waiting on FEMA. 2 months later we ran out of money,and had no choice but to find something for rent. We Found a home with an assumable mortgage, the sellers and us, the buyers "assumed" "assumable" meant "take over payments". We all saw a lawyer, and sign a contract to purchase the home. We needed to get our franchise opened and semi-established to apply for the assumable mortgage. We have done that and it seems the lenders have simply given us a new loan, and are requiring 5% down. We do not have any kind of money to put anything down, and again, were under the same impression as the sellers, that "we could simply assume the loan". We need to know the legal definition of "assumable mortgage" and why they are different from an out-right purchase??????? Please help!!! The other problem with this is we have been renting the home with the intent to purchase, but if we cannot "assume" the payments" without a down payment where does that leave us and the sellers????? Please help us, we have been through enough!!!!

[Blacky1]

Typically you will find only MTA's, COFI's, COSI's and LIBOR's (all Option ARM's) are assumable. With an assumable mortgage the way the lender will look at this is lets say the existing borrower (seller) carries a $95,000 lien on the property. If the house is worth $100,000, you (the buyer) would be required to come up with the remaining $5,000 plus closing costs.

[tanyabrown9]

Thank you! I have been waiting for someone to say something! BUT, the lenders are only financing the remainder of what's owed on the home- $74,000. They have already paid in for 7.5 years. No where in the paperwork does it mention "what the house is worth", for that matter, it is a manufactured home in an extremely slow Mississippi market, houses here barely increase 3-5% per year! Anyway, thats for the help, I think I will have to move again,rent something else so the sellers can sell, and I can save up AGAIN, for another home. My kids will probably all be in college before we can own a home again....

[Blacky1]

Right....if you were to "assume" the mortgage, there would have to be an appraisal done on the property. I would suggest buying an SFR. Stay away from the "wabblies".