All Forum Posts by: Netra Krishnappa

Quote from @Netra Krishnappa:

Quote from @Gordon Cuffe:

@Netra Krishnappa do you have any furniture to turn it into a short term rental?   If you did not purchase it , would you just keep living with family with no rent payments?  Call the loan servicer every day to keep pushing them to approve the loan. It should not take longer to close an assumption. They are just moving slow because they are not working on commission. 

Hi Gordon,

I guess commission might be one of the reasons but the HUD regulation states that, "Assumption creditworthiness review processing must be completed within 45 days from the date the lender receives all necessary documents" I did send this information to the lender and there is no response yet. They only say the assumption process will take several months and they can't the process the application any faster, as they have a lot of work load and its been over 75 days now  :(

(Oops pressed post before my comment was complete)

As for the STR, the HOA rental restriction is maxed out for the complex so I can't rent the place out :(

Quote from @Gordon Cuffe:

@Netra Krishnappa do you have any furniture to turn it into a short term rental?   If you did not purchase it , would you just keep living with family with no rent payments?  Call the loan servicer every day to keep pushing them to approve the loan. It should not take longer to close an assumption. They are just moving slow because they are not working on commission. 

Hi Gordon,

I guess commission might be one of the reasons but the HUD regulation states that, "Assumption creditworthiness review processing must be completed within 45 days from the date the lender receives all necessary documents" I did send this information to the lender and there is no response yet. They only say the assumption process will take several months and they can't the process the application any faster, as they have a lot of work load and its been over 75 days now  :(

Quote from @Joe Homs:

@Netra Krishnappa its difficult to advise you without knowing everything, but something smells fishy in this transaction.  Be very careful.

Thanks Joe. 

I know its quite frustrating at this point with no solid answers to my questions.

Quote from @Joe Homs:

@Netra Krishnappa first of all there are only two types of assumable loans, FHA and VA. Everything else can be taken over subject to financing if you know what you are doing. How much is the loan for? Are you coming in with the difference in price. It sounds like you are working with a RE agent and lender, so I hope they are treating you right.

Good Investing...

Hi Joe,

Apologize, I missed your message.

Its a FHA loan and the loan I will be assuming is around $385K.

It sounded like a great financial investment at the time but with 3 months in its NOT making any sense anymore and the lender/loan service agent is NOT helpful either. And my agent has been only quoting that its a great interest rate when I tell her that all that $$ saved is already lost due to rent and purchase price increase. I paid extra $7500 plus last two months rent of $6000, plus the lender has already charged me $2300 for processing the assumption and mentioned that if we cancel at this point I will lose most of the fee, so it will take me years to gain that money back. And recently I learned that the original loan has PMI which I cannot remove without refinancing and at that point I will lose the low interest rate which was the selling point.

What would you do in this situation?

Regards,

Netra

Hello all,

I need advice on a bad housing situation I am in.  

In June 2023, a property in Pleasant Hill, CA area came on market for sale at $468K and seller had offered for the buyer to assume his loan (at interest rate of 3.5%) so I made an offer at $475K and Special assessment for balcony remodeling of about $5700. We agreed on an offer of $485K, with a contingency of the loan being assumable and property appraised at $485K.

Since the assumable process was lengthy and would NOT close in August, the seller and his agent wanted me to cover the monthly mortgage payments and made me get into a rental agreement if I wanted to the property or else seller was cancelling the contract, as I was getting the seller’s amazing 3.5% interest rate, I signed the rental agreement to rent till the Loan would go through. Its 2 weeks to end of August but the loan is still in processing and no sign of closing before end of August (loan officer mentioned it assumable loan take several months). When I made the calculations even at the amazing 3.5%, the $$$ will take me 6-8 months to recover and the savings made on the lower interest rates. Also, I am currently living with family so I don’t have to pay rent till the loan goes through and I paying this property a rent for no reason and in fact I am NOT living at as I am worried if the loan falls through I will have to move again.

I feel like I am NOT making the best decision, I am tempted with this amazing interest rate and confused by the bad market situation.

Does it make any financial sense for me to move forward with this offer and pay him rent till the loan closes or should I cancel the contract?

Thank you very much in advance, all advices are appreciated.