Some of the rates buyers are waiting for are still attached to homes. The trick is knowing where to look and what to look at after you find one.
By Sherri Echols, Broker Associate, eXp Realty
Everybody wants to know when mortgage rates are coming down.
Buyers are waiting. Sellers are waiting. The news is watching the Fed. Somebody on television has a prediction every twelve minutes.
I finally decided I was asking the wrong question.
Instead of asking, “When are low mortgage rates coming back?” I started asking:
Where are the low mortgage rates that never left?
Because they didn’t all disappear.
People are living in them.
If you haven’t read it yet, I explained the bigger idea in The Low Mortgage Rates Never Left. Some of the financing buyers wish they could still get may already be sitting underneath homes in the market.
Now the question becomes: how do we find it?
I Started Hunting for the Mortgages
Once I started researching properties differently, I began finding FHA and VA financing recorded during those lower-rate years.
I’ve found rates in the twos, threes, fours, and fives. In my own research, I’ve seen recorded rates around 2.73%, 2.78%, and 2.96%.
That does not mean every one of those homes is currently available, every loan can be assumed, the recorded information tells us everything we need to know, or every buyer qualifies.
It means there are rocks worth turning over.
And once you see that, you stop looking at listings quite the same way.
Yes, I’m still looking at bedrooms, bathrooms, location, condition, and whether somebody committed a crime against humanity with gray vinyl flooring.
But now I have another question.
What money is already attached to this house?
A $500,000 House Doesn’t Tell Me Enough
The asking price tells me what somebody wants for the property.
It doesn’t tell me how the purchase might be financed.
Suppose you’re considering a $500,000 home with an assumable mortgage at 3%.
Sounds fantastic.
Now I tell you there’s only $200,000 remaining on that mortgage.
The seller has roughly $300,000 of equity between the assumed balance and purchase price before other transaction-specific costs and adjustments.
That’s a completely different opportunity than a $500,000 house with $450,000 remaining on a similar low-rate loan.
This is why I won’t simply hand somebody a list sorted from lowest interest rate to highest and call that strategy.
The prettiest rate doesn’t automatically win.
The Balance Matters Almost as Much as the Rate
If you’re assuming a mortgage, the low rate only applies to the balance you’re actually assuming.
A fantastic rate on a relatively small portion of the purchase may not transform the transaction.
A somewhat higher assumable rate with a much larger remaining balance might create a better complete financing picture.
That’s why I keep asking:
2.75% on what?
I want to know the balance.
I want to know the seller’s equity.
I want to know how the equity difference will be handled.
I want to know the complete monthly housing cost.
And I want to compare the entire thing with the financing alternatives available to that buyer.
Finding the low-rate mortgage is only the first step. Once we find one, we still have to decide whether the balance, equity gap, qualification, payment, and property actually make it a good deal.
That’s the next part of the process in You Found a 2.75% Assumable Mortgage. Now Let’s Try to Talk You Out of It.
A Real Bryan–College Station Example
This is not just a theoretical exercise. One of the real assumable-mortgage opportunities I’m currently marketing in College Station is 3906 Brownway Court.
The home has a potentially assumable VA mortgage at approximately 5.25%, with approximately $406,000 remaining on the loan and an approximately $21,000 difference between the remaining mortgage balance and the current purchase price.
Is 5.25% the lowest assumable rate I’ve ever found?
No.
But that is exactly why this example matters.
The relatively large remaining mortgage balance and comparatively smaller equity gap may make the complete financing structure worth investigating for the right qualified buyer.
This is what I mean when I say the prettiest interest rate does not automatically win.
We have to look at the rate, balance, price, seller equity, buyer qualification, property and complete payment together.
Sellers Should Look at Their Mortgage Differently Too
This isn’t just a buyer strategy.
If you own a home with a lower-rate FHA or VA mortgage, I don’t want you automatically thinking of that loan as something you simply lose when you sell.
First, let’s find out what you have.
Could it potentially be assumed?
Approximately how much remains?
How does that compare with your home’s likely value?
Could the financing make the property more interesting to a qualified buyer?
Could it help your home stand out against competing inventory?
Maybe.
And if you’re selling because you need another home, there’s another interesting possibility.
You may be selling a home with potentially valuable financing and then becoming the buyer looking for potentially valuable financing yourself.
Now we’re thinking about the whole move differently.
This Is Why I Built the LIST
I wanted a place where buyers could begin looking at properties where the existing FHA or VA financing deserved investigation.
Not a magic catalog.
Not “every house on this page comes with a guaranteed 2.75% loan.”
A hunting ground.
We identify a property that looks interesting.
Then we verify.
What loan is actually there?
Is it eligible?
What’s the current balance?
What’s the seller’s equity?
Does the buyer qualify?
Does the house itself make sense?
Does the entire transaction beat the alternatives?
That is how I want people shopping.
The Rate Is Only the Beginning
Finding a low-rate assumable mortgage gets my attention.
It does not finish the analysis.
We still need to look at the purchase price, remaining loan balance, seller equity, buyer qualification, property condition, taxes, insurance, HOA costs when applicable, and any additional financing needed.
The house still has to make sense.
The financing still has to make sense.
And the combination of the two has to be better than the realistic alternatives available to that buyer.
I’m not interested in making an assumption happen just because we found a pretty rate.
I’m interested in finding out whether the entire opportunity works.
Don’t Wait for Perfect
Could mortgage rates fall in the future?
Sure.
Could they rise?
Sure.
Could they move around for reasons neither one of us controls?
Of course.
Your life may not care.
A baby is coming.
The kids left.
Your job changed.
You got orders.
You’re retiring.
You need a different school area.
You want to get closer to family.
Waiting is still an option.
I just don’t want you waiting because you think today’s advertised mortgage rate is the only financing in existence.
Some of those lower rates never left.
They’re sitting underneath houses.
Now we need to find out whether one of them is attached to the right house, with enough balance, the right numbers, and the right people to create a real opportunity.
Ready to Look at Assumable Home Opportunities?
If you’re ready to start looking beyond today’s advertised mortgage rates, you can explore more information about assumable homes in Bryan–College Station and the Brazos Valley.
Explore Assumable Homes in Bryan–College Station
Remember, identifying a potentially assumable mortgage is only the beginning. The existing loan, current balance, seller equity, buyer qualification, property, and complete financing structure still need to be verified for the individual transaction.
Frequently Asked Questions About Finding Assumable Mortgages
Where can I find assumable homes?
Potential opportunities can be identified through property and loan research, real estate listings, seller information, and other available sources. The existing loan and assumption terms still need to be verified before treating a property as a true assumable-mortgage opportunity.
Is the lowest assumable mortgage rate always the best deal?
No. The remaining loan balance, seller equity, purchase price, additional financing, property condition, and complete monthly payment can matter just as much as the interest rate.
Can sellers advertise an assumable mortgage?
When the financing is legitimately assumable and accurately represented, it may become part of the home’s marketing story. The mortgage and assumption requirements still need to be verified.
Can I assume only part of a purchase price?
The existing mortgage balance is what may potentially be assumed. The difference between that balance and the purchase price still has to be addressed through the transaction.
Are conventional mortgages assumable?
Most conventional fixed-rate mortgages are not assumable. Certain conventional adjustable-rate mortgages may allow an assumption depending on the specific loan terms and requirements.
FHA and VA mortgages are a major focus of this campaign because assumption provisions are much more commonly relevant with those loan programs.
About Sherri Echols
Sherri Echols is a Broker Associate with eXp Realty serving Bryan–College Station, the Brazos Valley, and northwest Greater Houston.
She researches potential assumable-mortgage opportunities and helps buyers and sellers evaluate the house and the financing together.
Written by Sherri Echols, Real Estate Broker in Bryan–College Station, Texas
Broker Associate, eXp Realty
Call or text: 979-492-0101
