What if we told you that you could still purchase a house and have a 30-year mortgage at a sub 3% interest rate, even with rates near an all time high?
It’s possible, thanks to assumable mortgages, which allow homebuyers to take over the existing mortgage terms from the seller. All government-backed loans, such as FHA and VA loans, are eligible for assumption, and millions of these mortgages are available. A number of conventional mortgages may also be assumable, if the lender agrees.
There are no special requirements to assume the mortgage, but you'll need the same kind of approval from the bank that would be required for a normal loan. Good credit score, sufficient income, and a decent debt-to-income ratio.
An assumable mortgage could end up working out for both the buyer and the seller.
If you’re selling…assumable loans allow you to capture a larger cash downpayment, since homebuyers can afford to pay more at a lower interest rate.
If you’re buying…assuming a mortgage with a rate as low as 2% could allow you to save up to thousands monthly. An assumable mortgage could also reduce the amount of closing costs required.
Check out Roam - a platform focused on brokering properties with an assumable mortgage.
If you’re thinking about buying or selling a home, reach out to Range.