On The Market 74: Assumable Loans: How to Time Travel Back to 3% Rates on Your Next Buy w/Craig O'Boyle
With assumable mortgages, you can snag a three percent interest rate even in 2023’s high-interest environment. These loans exist everywhere around you—you could be sitting on an assumable loan without even knowing it! So, if there’s a way to pick up properties at all-time low-interest rates, why isn’t everyone taking advantage of assumable mortgages? We brought Craig O’Boyle from Assumption Solutions on to the show to explain.
Assumable mortgages aren’t new, but most real estate agents, loan brokers, and homebuyers have no idea what they are. In practice, an assumable mortgage allows a homebuyer to “assume” a seller’s loan with the same interest rate, contingencies, and principal paydown as the seller. This means you can walk into a home with significant equity, a low-interest rate, and the same fix-rated loan you’d be picking up from a bank. But, if you want an assumable mortgage, you’ll need to know where to find one.
Craig walks us through the ins and outs of assumable mortgages, where investors can find one, why most mortgage lenders and brokers don’t know about them, and one BIG caveat you’ll need to hear before you chase down this better financing. Want a lower rate and monthly payment with higher cash flow? Stick around; we’ll give you everything you need to know to find a low-interest assumable loan in your area!
In This Episode We Cover
Assumable mortgages explained and why a bank would allow a buyer to assume a loan
Assumable loans vs. subject to and how one strategy is far riskier than the other
Fees you can expect to pay when purchasing a property with an assumable mortgage
House hacking and using assumable loans to profit off your primary residence
The three types of loans that can be assumable (and others that WON’T work)
The “assumption gap” and money you’ll need at closing to get the deal done
And So Much More!
Links from the Show
Find an Investor-Friendly Real Estate Agent
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Subject To Real Estate Explained
Connect with Craig:
Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-74
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