Posted on: 07th Feb, 2009 01:08 pm
I want to assume my sister's mortgage but she need cash to move out of state. The property valued at 385,000 but she has a mortgage of 220,000
First of all, the mortgage needs to be one that is "assumable". Most aren't and you would have to qualify anyway.
Other than FHA mortgages, most mortgages are not assumable.
I do not believe cash out is permitted with an assumable mortgage. I am 100% certain but hesitate to say that in this day and age.
If you are going to assume your sister's mortgage, the lender will make sure you qualify based on your income and credit history, etc.. So, if you can qualify to assume a $220,000 mortgage, you might also qualify to purchase the property with a gift of equity and a seller concession for the closing costs. That way you spend no money of your own and the mortgage can be 80% of the purchase price/value or less and your sister then gets money to move because your new mortgage is over $220,000. You will have to live in the property to be an owner occupied mortgage.
I do not believe cash out is permitted with an assumable mortgage. I am 100% certain but hesitate to say that in this day and age.
If you are going to assume your sister's mortgage, the lender will make sure you qualify based on your income and credit history, etc.. So, if you can qualify to assume a $220,000 mortgage, you might also qualify to purchase the property with a gift of equity and a seller concession for the closing costs. That way you spend no money of your own and the mortgage can be 80% of the purchase price/value or less and your sister then gets money to move because your new mortgage is over $220,000. You will have to live in the property to be an owner occupied mortgage.
vas are assumably also. cash out is a second mortgage. although sales and secondary financing can be escrowed, banks are normally befuddled by this ... so the quick answer is "no".