<a href="https://archive.ph/4JclX" rel="nofollow noreferrer">https://archive.ph/4JclX</a><p>subtitle: "Loan assumptions, which let a home buyer essentially take over a seller’s mortgage, are hard to find and hard to pull off"<p>'There are millions of outstanding mortgages with a 3% interest rate. A new startup says it can help today’s home buyers get their hands on them.<p>Mortgage rates are now above 7%, leaps and bounds above the 3% they grazed two years ago. Buyers and sellers alike are giving up, sucking demand and supply out of the housing market. And things are expected to stay that way, with the Federal Reserve signaling plans to keep rates high for the foreseeable future.<p>Roam, a real-estate company set to launch Wednesday, is betting that it can popularize an obscure workaround. “Assumable loans” allow sellers to transfer their own mortgage loans to the buyer alongside the house.<p>n theory, the idea sounds great, at least for discouraged house hunters who can inherit a lower-rate loan. Sellers, in turn, might fetch higher prices for their houses.<p>But Roam’s vision faces an uphill battle. Loan assumptions haven’t gained much traction recently, even though rates are up. Many lenders are cool to the idea because for them it would mean more work for less money.'
Is this pay more now for a lower interest rate?<p>To compare it to bonds, imagining I can sell my own bonds: To raise the same amount of money issuing a bond with a 3% coupon now vs. issuing one with a 7% coupon now, I'd have to issue more of the 3% coupon bond.<p>This seems an obscure bet on perceptions of house prices, house purchase heuristics and mentality, and a lot of imagination. I can imagine why lenders are 'cool to the idea'.<p>Please correct me if the above understanding's incorrect.
Not sure this model will work...because buyers are generally not interested in paying 1% of the purchase price for a service their real estate agent is able to provide for free. There is another search tool that's much more effective in connecting buyers with directly to listings with assumable loans that cost just a couple bucks per month. It's called AssumeList (<a href="https://assumelist.com" rel="nofollow noreferrer">https://assumelist.com</a>) - and allows buyers and agents to search for homes that have assumable loans and then pursue those homes for nothing...no 1% fee. AssumeList is brand new and hasn't officially launched yet. I've heard it will launch in the DC, VA, MD market first and then expact accross the county in the months ahead.
Following up on the jkuria post about the WSJ article regarding ROAM and the 3% Assumable Mortgage as compared to the 3.5% MiiX R.O.C. residential & personal financing.<p>The release of the MiiX R.O.C. and ROAM products only magnify the urgent and desperate need for reform in the mortgage, housing, insurance and personal finance markets. Hat's-Off to these two co's for stepping forward!
Are assumable mortgage loans legal in the United States?<p>Additionally, let's say an individual chooses to use Roam to sell their home and transfer the mortgage. In a normal market, the interest rate is unique to the buyer, but in the Roam market, the interest rate is now on sale as part of the house deal. This will increase demand for the house, and the seller can ask for more money. Presumably, the amount more that they'll ask for will erase some of the savings that the buyer will realize from the lower interest rate. The mortgage payment for a 500k house at 7% is comparable to a 750k house at 3%, but the required down payment for the latter is much higher.
>> Roam says it will recommend lenders to provide additional financing. It wouldn’t specify which lenders it will work with. Roam will collect a fee from the buyer that equals 1% of the purchase price.<p>Yes, you'd have two loans.<p>It's an interesting idea, and one we floated by our mortgage lender. Our mortgage lender did not seem to like it, because I don't think they make as much. This makes one think, are there better ways for mortgages available that are not considered because the mortgage company does not make as much?
MiiX Financial (www.MiiX.Financial) has a 30 Year 3.5% Fixed "R.O.C." product coming available (Residential Ownership Certificate). It's essentially an updated version of the antiquated 30 year mortgage developed to meet / match / compete / comply with todays standards. There is certainly some inventiveness and creativity flowing in this sector and should be watched closely for a breakout product/solution...
Little known fact: VA mortgages are assumable for other veterans.<p>A US veteran that purchased in the low-interest rate environment has a significant advantage as a seller in today's market.
I don’t get why the seller just wouldn’t do seller financing. Not that hard to structure so that they lose nothing if the buyer defaults (assuming a reasonably large down payment). I guess the only down side is not being able to get any equity out of the sale apart from the down payment. But the down payment along with the new income source probably should be plenty in most cases to be able to afford to purchase your next house.