• When potential homebuyers have found the perfect home and are ready to make an offer, they first need to obtain financing and take out a mortgage from a lender. There are many different loan products available but one that many people have never heard of is called  an assumable mortgage. This type of loan is an alternative to the traditional mortgage and is quite different. With an assumable mortgage, the home buyer has the ability to take over the existing mortgage of the homeseller as long as the lender of that mortgage approves. Assumable mortgages are a unique lending instrument that allows someone else to take over the payments for you.

Assumable mortgages are very different and are also usually not very common today's market but depending on your situation, they may work for you. Below are the basics of assumable mortgages and what they can do for you.

How They Work

An assumable mortgage works in that another person can take over the loan that was originally issued to someone else. In order to assume the mortgage, the purchaser must qualify for the loan and pay closing fees, including the appraisal cost and title insurance. This can be beneficial for a piece of property that has been difficult to sell. A potential buyer can take over the current mortgage rather than obtaining their own financing. If you are in a situation where you need to sell a home quickly this can be an option.

Benefits of Assumable Loans

The process of converting the original loan to an assumable mortgage, is relatively simple. Because the buyer will not need do go thru the closing process or obtain a property appraisal, the entire process can be completed quickly. 

If the original loan was written during a time when interest rates were low, that is a big benefit to the buyer. The buyer is guaranteed the original interest rate, they do not have to take whatever rate the market is at currently. dictates to them.

If you are the seller and need to sell the home quickly, offering an assumable mortgage is a big attraction to buyers. 

Disadvantages of Assumable Loans

One risk for this type of mortgage can exist for the seller of the home. Some assumable mortgages can hold the seller liable for the loan itself even after the assumption takes place. Thus if the the buyer were to default on the loan, potentially the seller could be left responsible for whatever the lender is unable to recover. The homeseller can avoid this by indicating their release their liability in writing at the time of the assumption.

Sometimes large down payments can be required and could be difficult for some buyers to obtain.

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It can be a difficult decision to select the right moving company once you have purchased a new home. Whether it's cross-town or cross-country, you will be considering price, time, and of course quality. You want to find a reputable company who will not only give you a fair price, but also take great care of your belongings. While some moving companies may be better than others, accidents can and will happen. So should you purchase moving insurance?

1. Declared value: The value of your possessions is based on the total weight of the shipment multiplied by a specific amount per pound. For example, if the specific amount is $1.50 per pound, and your household goods weigh 15 000 pounds, the mover would be liable for a maximum of $22,500.
2. Lump sum value or Assessed Value: If your household goods do not weigh much, but are valuable, you can purchase insurance for a specific amount per $1,000 of value. This must be declared in writing in your contract, inventory paperwork o bill of lading.
3. Full value protection: This type of valuation most closely resembles actual insurance, and it includes lost, damaged or destroyed property. Just as with an insurance policy, the coverage will pay for the repair or replacement and deductible will apply.

Finally some good news regarding foreclosures! According to RealtyTrac's latest report, defaults fell 7 percent in May. Overall foreclosure activity fell 3 percent during the month and is virtually unchanged from the level of a year ago.

"The numbers in May continued and confirmed the trends we noticed in April: overall foreclosure activity leveling off while lenders work through the backlog of distressed properties that have built up over the past 20 months," said James J. Saccacio, chief executive officer of RealtyTrac. "Defaults and scheduled auctions combined increased by 28 percent from 2007 to 2008 and another 32 percent from 2008 to 2009 - creating a build-up of delayed bank repossessions. Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed."

In May, a  total of 96,462  properties received default notices, this is a 7% percent decrease from April and a 22 percent decrease from May 2009. The recent drop of foreclosures are finally a positive sign for the real estate market and with the a decrease in foreclosures, property values finally have a chance to increase.   

Nevada continues to have the nations highest foreclosure rate, nearly five times the national average. Arizona comes in second with Florida and California next in line for highest foreclosure rates.

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