Is something like this even possible? Take over SOMEONE ELSE'S MORTGAGE!!?

Ok check this out. I've really been thinking about what is going on here in Tucson and Phoenix housing. Its crazy. Prices have doubled in Tucson and tripled in phoenix in just 6 years.

I came up with this idea. See, many people that bought houses in the last 3 years especially over 200k and above prices will go into foreclosure since they are buying at double the price from just about 5 years ago.

So here's my idea. Say for example this guy bought a house in phoenix in 2016 for 130k. That house right now is around 190k in just 3 years. Say he loses his job and is behind on his mortgage payments. He may go into foreclosure and lose his house and mess up his credit.

This is where I step in. I offer to pay his last 3 months of mortgage payments to make him current. I offer him another $4000 for moving expenses. Then I just take over his mortgage.

Here are his benefits:

1) I pay his back payments to make him current.

2) I pay his moving expenses.

3) I save his house from going into foreclosure and save his credit.

My benefits:

1) I don't have to make a down payment since I just take over his existing loan.

2) this is huge. I get to take over the loan at his price 3 years ago which is only 130k. But the house today is worth 190k!!

This is huge. So basically I am getting to buy it at the prices of 2016 which is at least $50,000 cheaper than today.

Tell me why this can or cant work especially in this market where home prices are soaring

30 Answers

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  • ron h
    Lv 7
    8 months ago

    Mortgage assumption (often without credit qualification) used to be pretty common.  But i the last 20 years or so, lenders started writing mortgage contracts that don't allow that.   And, as someone else mentioned, few homeowners with equity walk away.  They'll sell cheaper to get some cash and to avoid having consequences from a repo.

  • zipper
    Lv 6
    8 months ago

    If he a gears and the Bank also likes you, you could pull that off, but the bank  needs to be in on this type of deal; if they refuse you your idea is shot in the BUTT!

  • 8 months ago

    I didn't bother to read the whole thing because it wasn't necessary. Why would someone who knows they can't pay their $130k mortgage wait three months and dig a hole for themselves when they can just sell the place and pocket a good chunk of that $60k in equity? No, they're going to dig that hole and then give you that equity in exchange for about $7k in back payments and 'moving expenses'?

    But let's say someone is that stupid. No, you cannot just take over the mortgage. Assumable mortgages disappeared starting sometime in the 1980s. Government-insured FHA and VA mortgages used to be freely assumable, then assumable only with lender approval, and even those are now gone. A conventional mortgage that was assumable with lender approval was rare anyway, and you don't see them anymore. Instead, most mortgages contain language that calls for the balance to be immediately due and payable if an owner transfers title (buyers must have their own financing and close the deal so the seller can pay off that old mortgage before the transfer of title can happen).

    The only exception to that 'due on sale/transfer' clause is in the case of a family member being able to take over the payments from an owner who has died, under a 1982 law that protects families in this situation from lenders who would call the loan immediately due. You would not qualify for this. You are going to pay the market price unless you have the cash to buy at a discount from someone who needs to sell in a hurry. You will not be taking over any mortgages.

  • Judy
    Lv 7
    8 months ago

    One problem - the title would still be in his name.  To get it changed to your name, it has to be paid off.  Second problem - why would he do that, just give you his equity rather than just sell the house?

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  • Anonymous
    8 months ago

    < I offer to pay his last 3 months of mortgage payments to make him current. I offer him another $4000 for moving expenses. Then I just take over his mortgage. >

    Dream on that he is going to hand over his equity to you which is what that $50k you are talking about is.  That ignores the fact that most mortgages today are not assumable.

  • 8 months ago

    Most mortgages aren't transferable.  If you found one that was, you'd need to qualify for the mortgage to have it transferred to you.   

    If he has $60k of equity in the house (190-130), then there is no logical financial reason he wouldn't just sell the house for 190, have $179k after commissions, pay off his loan, and have $49k cash in the bank.

    Now, if the house dropped below what he owes, say to $110k, then that's where short sales and foreclosures become real.  In that case, you wouldn't qualify for a loan amount of $130k with collateral only worth $110k.  

  • Anonymous
    8 months ago

    You need to concoct another plan .

  • Eva
    Lv 7
    8 months ago

    Most mortgage companies no longer allow someone to assume a mortgage. You might possibly be able to buy the house on a short sale, but you would still have to qualify for a new mortgage.

  • 8 months ago

    Unless he has a VA loan mortgages aren't assumable.  If a seller would permit you make his mortgage payments what's to prevent you from only making 3 then when you can't sell it, it becomes the sellers problem.  It's been tried before.

  • 8 months ago

    There are all kinds of things like that going on where people can't keep up with their mortgages.  Some mortgages are 'assumable' (maybe all, I'm not sure) so a person could just transfer the mortgage over to you.  A lot of people in financial trouble would be happy to just walk away from their homes and mortgages.  If you give them a little extra, I'm sure they wouldn't complain.

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