This Viral Mortgage Hack Doesn't Even Exist

Brought to you by the EveryDollar app. Start budgeting for free today. Since the rates are really high right now, my timeline is about 16 months or so to look into buying the house. Should I look into getting an assumption loan? There's no such thing. There's not? No. The only loans that can be assumed have to be reset and you have to qualify for them and they'll raise the rate. Oh right, but you wouldn't go into their rate? No. Where'd you hear this? I heard it on TikTok. It gets a lot of clicks and views on TikTok, but they're so rare because of how many stipulations have to take place that they pretty much never happen. So in the 1970s, loans that were FHA loans, HUD loans, were fully assumable without qualification and the interest rate did not move. They did away with that in the early 80s and that's the last time there have been fully assumable loans. All other loans have, for instance, in a Fannie Mae, a conventional deed of trust, paragraph 17, if you actually want to look it up. In paragraph 17, it's called a due on sale clause, meaning that the entire mortgage is due upon the sale of the property and they will call the entire loan. Okay. Now if that entity, let's say that's with a bank and they're using that and they have that paragraph 17 in their deed of trust. If they want to allow you to assume it, they're going to qualify you and they're going to reset the rate to current rates. Otherwise they would rather just get paid off because they'd rather get that 2% loan off the books and reloan the money at 6% current rates. So they don't want that loan out there at the current rates. Now let's fast forward one more time, Brian, since you called and we're in the teaching business here. The TikTok idiots, what they are suggesting is going to get you fried because there is a thing in the get rich quick real estate world where you just go in and you don't register the deed and you keep the property in the other guy's name and you agree to pay him by contract or contract for deed or whatever phrase they want to use for it. But once the mortgage company discovers that in effect the title has been transferred, even though it wasn't recorded, they're going to call the loan and foreclose on the property. So if you follow these TikTok morons and assume a loan without the bank's knowledge hiding it from them, that's a fraudulent transaction. You're going to get foreclosed on and lose all your money and you should because you're a freaking liar. Don't wait for the interest rate to be perfect before buying or refinancing a home. Talk to Churchill Mortgage. Smart buyers buy the home they can afford now and then refinance later if rates improve. Churchill helps you make decisions with confidence instead of guessing. And Churchill Mortgage has a web page with special offers just for our audience. Go to churchillmortgage.com slash Ramsey offer. This is a paid advertisement NMLS ID 1591 NMLSconsumeraccess.org equal housing lender. You lied. Okay. And that's what these guys are teaching you to do. It's a, it's a fraudulent technique. It's a lying technique by which you lie. And it's called contract for deed. You can do it that way. And it's a wraparound mortgage. These are all phrases we used in the seventies and eighties when we could actually utilize those old FHA loans legally and without being fraudulent. And we could wrap around them. We could do all kinds of stuff, but you cannot do that with modern mortgage documentation. They have the ability to call the loan and they will, as soon as they discover you're screwing with them. And they should. And you need to cover the cash gaps, whatever the home was worth, whatever the loan is, you've got to cover the difference in cash. Well, unless the flip this house TikToker wants to say, okay, you owe 140. We're going to sell you the house for 200. Um, we owe 140 on it. And, um, the last lady we bought it from, we never paid off her mortgage. It's still sitting there because we wrapped it and now we're going to let you wrap it up to 200 and they're going to let you pay the whole loan to them. And they're supposed to pay the underlying and never transfer the title. Title's not in your name. It's a mess. And so you're, what's known as screwed the first time something happens. I mean, the house burns down. You, the taxes are not in your name. You don't get notified. The taxes don't get paid. There's no insurance on the stupid house. Cause you can't put the insurance in your name because the mortgage company knows whose name the insurance company's in because they got a copy of it because their names on it too, as a payable, as a payee in the event of a fire. And so good Lord, it's just, it's just so crooked. So if the interest rates, the deciding factor just means you need to wait until you can afford that thing with current rates. Yeah. And by the way, 6% is what we're sitting at today. 5.9 on a 15 year fixed by definition. That is not high by definition. That is low in compared to historical data. It's dramatically low. 6% should cause a real estate boom. Interest rates are not what's holding people back. Okay. In fact, you got all these other loans. You got no control of your money and you don't have the money to put, you know, haven't saved up the money and you're trying to buy a house. You can't afford in the city. You can't afford to live in this. These are the problems you get into. So yeah, please, Brian, don't listen to people doing real estate deals on TikTok. Good Lord. That's the worst possible. That's as bad as Reddit. These are the two sources of sewage. It's just, it's just raw sewage. You will die from salt, raw sewage. It'll kill you. Create your free every dollar budget today. The simplest way to budget for your life.