Seller Mia has an FHA-insured mortgage with a below-market interest rate. A buyer asks whether the loan can potentially be taken over instead of getting a brand-new mortgage. Which statement is most accurate?
Correct Answer
B) FHA-insured single-family forward mortgages are generally assumable under program rules
That is the most accurate statement. Current HUD guidance explains that FHA-insured single-family forward mortgages are generally assumable, although program rules and lender approval requirements still matter in the transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
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