Is an assumable mortgage worth it now?

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With mortgage interest rates elevated, here's why an assumable mortgage might be worth thinking about.

Shopping for a mortgage right now can be a headache for potential homebuyers. Everywhere you look, you find mortgage rates that are higher than they were just a few years ago, with the national average sitting at 8.04% for a 30-year fixed-rate mortgage. With inflation still higher than the government's target, there is a chance that the Federal Reserve could hike federal interest rates again this year, which could send mortgage rates even higher.

That said, there are some costs associated with assumable mortgages that don't come with getting a new loan. For instance, if you assume a mortgage that originated as a VA Loan , you'll have to pay a funding fee, which is generally 0.5% of the remaining value of the mortgage. Make sure you do the math and that you are actually saving money when you consider an assumable mortgage.

 

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