[February 07, 2023]

Carrington Mortgage Services Makes the Mortgage Assumption Process Easy for Customers

Carrington Mortgage Services, LLC (CMS), one of the nation's largest privately held non-bank lenders, boasts an impressive slate of loan offerings and services direct to consumers, investors, mortgage brokers and mortgage bankers nationwide. In another important addition to its services, CMS is making it easier for customers to take advantage of assumable mortgages, allowing qualified buyers to purchase a home by assuming responsibility for the seller's loan terms including the current balance, interest rate, remaining term and any additional terms of the mortgage. In today's high-interest-rate environment, assuming a current mortgage could result in significant interest savings if the mortgage is at a lower interest rate compared to current market interest rates.

"Carrington is committed to ensuring borrowers have every possible opportunity to obtain a loan on the home they want," said Greg Austin, EVP, Mortgage Lending for CMS. "Assumable mortgages are another loan option that Carrington is educating home sellers and buyers about in this very complex real estate market."

Carrington is engaging with eligible homeowners in their servicing portfolio to let them know that selling their home by allowing a new buyer to assume their low-rate mortgage is a possibility. Carrington's real estate division is also educating Vylla Agents about the details of the program so they can work with prospective buyers and sellers. Not all types of mortgages are assumable. FHA and VA mortgages can be assumed, while USDA and Conventional ARM mortgages may be assumable, but only under specific conditions. When assuming FHA mortgages specifically, Carrington may offer a simultaneous second lien to the qualifying buyer for an amount up to 80% of the determined property value. In the case of a VA loan being assumed, if the assuming qualified buyer is a non-veteran, the seller's VA entitlement will remain tied to the assumed property and cannot be used by the veteran to purchase another property until the assumed loan is paid in full.

Sellers who have a mortgage that is eligible for assumption may benefit from advertising the assumable option the mortgage carries, which makes their home more attractive to buyers. This option allows the buyer to assume te seller's current interest rate, which could be much lower than current market rates, making the home more affordable. Fees are typically lower on assumed mortgages; and there is no appraisal needed. The buyer assuming a loan will need to go through the application and underwriting process to qualify with CMS. CMS will have to approve the full transfer of liability from the seller to the buyer, requiring that the buyer qualify. Qualifying would include, but is not limited to, credit and income requirements. If the current value of the home is higher than the remaining principle balance (also known as home equity), the buyer will have to cover the difference at closing with cash, or cash and a second mortgage loan, depending on the maximum combined loan-to-value ratio determined by CMS. In cases of property transfer or inheritance, where a sale is not initiated, the process for assumption of a mortgage may be simpler.

Carrington's real estate division Vylla Home can work with both buyers and sellers. "Our real estate agents are able to assist sellers by letting potential buyers know an assumable mortgage is an option," said Chad Ruggles, SVP of Vylla Home. "Vylla Home, and our 1,300-plus dedicated real estate professionals, is uniquely positioned to work with buyers to identify which mortgages may be assumable."

CMS' diverse product offerings include FHA, VA, USDA and conforming Conventional products. In addition, Carrington's proprietary non-QM Prime Advantage^SM, Flexible Advantage^SM and Investor Advantage^SM products were specifically developed to further demonstrate the company's ongoing dedication to non-traditional borrowers. With Carrington's ProcessIQ^SM product, approved CMS Wholesale brokers have the option of having Carrington process the loan as part of its underwriting. When an enrolled broker submits a non-QM or full-doc FHA, VA or USDA loan, they can request that the Carrington ProcessIQ team handle all of the logistics and work directly with the borrower Most recently, Carrington introduced a Second Lien program that provides a welcome source of liquidity to existing CMS servicing customers who have seen an increase in the value of their homes, and who now face a rising-interest-rate market in which they may not see a benefit accessing their home equity by replacing a low first-lien rate to obtain a cash out.

There is more information on assumable mortgages, including a video, on this page; and to determine eligibility, borrowers can contact the Carrington Homeownership Concierge at 866-204-1545.

The Carrington Companies

Carrington is a holding company whose primary businesses include asset management, mortgages and real estate transactions. Collectively, the businesses are vertically and horizontally integrated, and provide a broad range of real estate services encompassing nearly all aspects of single family residential real estate transactions in the United States. To read more visit: www.carringtonhc.com.

Through its collective associates made up of Carrington leaders and employees, the company's nonprofit organization, Carrington Charitable Foundation, contributes to the community through causes that reflect the interests of Carrington Associates. For more information about Carrington Charitable Foundation, and the organizations and programs it supports through specific fundraising efforts, please visit: carringtoncf.org.

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