If you offer to assume the mortgage, does that not mean you pay less selling price to them (buy, accept)

[NJ Brazen_3133]

If someone is offering to assume your mortgage, then doesnt that mean they make an lesser buying offer than someone taking out another mortgage to give to you so you can pay off your bank?

Like lets say you buy a building for $2mil and have a mortgage, and then want to sell for $3mil. That $3mil will go to paying off you interest and whatever penalties. Now if someone approaches you and says they will assume the mortgage you already have then wouldnt they make an offer much less than $3mil?

It would not make much sense for this new person to take a $3mil mortgage just to pay you, and then also buy your mortgage that he has to pay off does it?

Or am I completely confused.

[Lowexpectations]

If you are asking 3mm and your mortgage is 2mm if you accepted an offer to just assume the mortgage the deal would be worth what the outstanding mortgage is. If you got 1mm in cash and an assumed mortgage it would be a 3mm deal

[leastprime]

Is the mortgage really assumable? Conforming loans are Not assumable. IIRC

[Lowexpectations]

Originally Posted by leastprime

Is the mortgage really assumable? Conforming loans are Not assumable. IIRC

A conforming loan would be a pretty small loan for a 2-3mm property

[thelopez2]

Originally Posted by NJ Brazen_3133

If someone is offering to assume your mortgage, then doesnt that mean they make an lesser buying offer than someone taking out another mortgage to give to you so you can pay off your bank?

Like lets say you buy a building for $2mil and have a mortgage, and then want to sell for $3mil. That $3mil will go to paying off you interest and whatever penalties. Now if someone approaches you and says they will assume the mortgage you already have then wouldnt they make an offer much less than $3mil?

It would not make much sense for this new person to take a $3mil mortgage just to pay you, and then also buy your mortgage that he has to pay off does it?

Or am I completely confused.

No, they'd come in with $1,000,000 down and assume the mortgage. It comes at a high risk to the seller if done incorrectly.

Sometimes the original assumable mortgage has very favorable terms over a new mortgage. A new mortgage might be at 6% where the assumable mortgage might be at 3%. Not all mortgages are assumable and the actual term might be used to trick the seller if they don't know what they are doing.

[rjm1cc]

No you got the bigger sales price. You get cash plus you no longer have to pay the mortgage.
Same result if they gave you cash for the total sale price and you paid the mortgage.