Assuming a VA or FHA Loan *ADVICE/Mentor*
Hello to All,
Background: I am looking to increase my portfolio. I currently have one condo that I enjoy living in. I would like to buy a second property to rent out, however, I do not have 20% for a downpayment to make it a rental. I could use a VA/FHA loan and live in the new place for 1 year, then move back to my condo and rent the other out.... So that is when I started looking at other options.
Idea: My co-worker in the military is being re-stationed over seas. He has a VA Loan on his house. Could I "Assume the Loan" and pay it for him so he does not have to worry about selling it and paying closing costs? I am still learning this whole process of assuming someones loan.... What are the stipulations? Is it true that if he has equity in the property; that I can use that as the downpayment? Is he still on the loan and we split the equity when I decide to sell the property? Is he removed from the loan? I am a little confused.. Any pointers to the right direction?
What are the pros and cons?
Thank you, Wayne