REINCheck

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VO [00:00:06] You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialists at REIN, where you get the latest member news and information delivered straight from the source, REIN MLS.

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Andrea Rice [00:00:20] Hello and welcome to REINCheck. I'm your host, Andrea Rice, and today we are checking in with REIN Sales Manager Advisory Committee member Becky Claggett to discuss REIN's Assumption Addendum. Becky, thank you so much for joining us today.

Becky Claggett [00:00:34] Oh, I thank you. I'm happy to be here.

Andrea Rice [00:00:37] Well, and just for some background for our listeners, the Sales Managers Advisory Committee was recently asked by a couple of members to review the Firm Equity Assumption Addendum. You know, with the market changing, members just wanted to be sure that this form would still be suitable for assumptions because it hasn't been updated in a while. But we did take a look at it.

Becky Claggett [00:01:00] Yes, that's true. The form has not been updated in some time, but SMAC's reviewed the form and while it hasn't been updated, it still serves its purpose and it's a great comprehensive form to use.

Andrea Rice [00:01:13] Great. And now that our members know that the assumption form is up to date, let's talk a little bit about what exactly is in an assumable mortgage.

Becky Claggett [00:01:24] Okay. And an assumable mortgage is a mortgage the seller has in place that allows the new borrower to apply and go through the process of being approved to take over that existing mortgage.

Andrea Rice [00:01:38] Yeah. And with interest rates going up, I would imagine it's likely that the market could see more of these types of loans. But not all loans are assumable, right? And you may need to actually take out a second home loan, is that correct?

Becky Claggett [00:01:52] Yes. In our markets, many loans are assumable. VA loans and FHA loans, for example, are assumable with qualification. If the loan is not assumable, then the purchaser would need to get a new loan, but likely with a higher interest rate than on the existing assumable mortgage.

Andrea Rice [00:02:11] Okay. And where exactly does REIN's Firm Equity Assumption Addendum come into play in this process?

Becky Claggett [00:02:19] Okay. For listing agents wanting to market a home with a loan that's assumable, it's great to get all of the terms of the loan ready. This form has all the info you're going to need to know to give to buyer agents. For the buyer agents with a buyer who wants to purchase a home with a loan that's assumable, it'll spell out all the terms in detail, including the rate, the remaining years on the loan, the approximate balance, even address hazard insurance. It allows you to address release of liability and substitution of eligibility for VA loans. It's a very comprehensive form for this purpose.

Andrea Rice [00:03:00] Yeah, and for our members who haven't really taken a look at it if you just pull it up, you can see that it covers a lot on that form. And of course, you know, always ask your broker if you're not sure how to fill it out. But before we wrap things up, is there anything else that you would like to add?

Becky Claggett [00:03:17] I think just keeping in mind with assumptions that the timing is very different and it can be different for each different mortgage company. The process is not as streamlined necessarily as a new home loan is. Also, the fee structure for each assumable mortgage could be very different, so you may need some extra time from contract to close for these deals. You're going to need some extra information upfront for these deals of what the cost are involved and who's going to pay them. Also, the sales price will be approximate, but the equity firm is the equity is firm as the balance on the loan actually changes every day during the process of from ratifying the contract to close. It'll be interesting to see how much of our housing market is assumable in the future.

Andrea Rice [00:04:10] And that's a lot of good information. I wouldn't have thought that necessarily it might take a little longer, but that's a good point too, and how that balance can change, you know, day to day. So a lot of good information. Thank you, Becky. I really appreciate you taking time to be here today. Help us stay informed and you just give a give a little bit of a background on that assumption form and let everyone know that it is there if you need it. And I want to thank all of you out there today for listening. I hope you enjoyed this episode of REINCheck. If you have missed any of the previous episodes, I do invite you to go to REINMLS.com to take a listen. And as always, you can subscribe to get the future episodes delivered directly to you when they are released. Thank you and have a great rest of your day.

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VO [00:05:02] You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source REIN MLS.

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