How to Search for That Elusive Assumable Loan

Finding a home with an assumable mortgage can feel like searching for a golden ticket. As a buyer, you get the chance to take over the seller’s existing low mortgage rate, saving potentially hundreds of dollars per month. But tracking down these uncommon loans takes diligence and know-how.

I should know. As a real estate agent with over 10 years of experience, I’ve helped numerous clients locate and acquire homes with assumable mortgages. It’s a rewarding journey but not an easy one. These loans only make up around 6% of properties on the market. You can’t just flip through listings expecting to spot them left and right.

Succeeding in your hunt requires understanding what makes a mortgage assumable, where to look, and how to take the right steps once you find a promising option Consider this your guidebook to navigating the assumable mortgage landscape.

What Exactly is an Assumable Mortgage?

Simply put, an assumable mortgage allows a home buyer to take over the seller’s existing home loan. This means you assume responsibility for making the remaining mortgage payments, inheriting the outstanding balance interest rate and repayment terms.

It’s a unique scenario where you get to take advantage of potentially more favorable financing the seller locked in previously. For example, if they refinanced when rates were just 3%, you could acquire that low rate instead of taking out a new loan at today’s higher rates.

But not every mortgage can be assumed. Certain loan typesoffer more assumable flexibility:

• FHA loans – Federal Housing Administration mortgages are often assumable if lender-approved.

• VA loans – Eligible for assumption by qualified veterans and, in some cases, non-veterans when credit criteria is met.

• USDA loans – For low-income borrowers in rural areas, these U.S. Dept. of Agriculture loans can sometimes be assumed.

• Certain jumbo loans – A small subset of jumbo mortgages from portfolio lenders allow assumptions.

• Specific ARMs – Some adjustable-rate mortgages permit assumption, though uncommon.

Conventional loans, unfortunately, are generally not assumable due to “due on sale” clauses requiring full repayment upon transfer. The original mortgage contract must include an assumption clause to make transfer possible, still requiring lender approval.

Now that you understand the basics of an assumable mortgage, let’s explore proven methods for locating listings tied to these uncommon loans.

Partner with an Agent Knowledgeable About Assumable Loans

Having an experienced real estate agent on your side can make a monumental difference in finding an assumable mortgage opportunity. Their industry expertise offers two major advantages:

1. Access to Additional Listing Details

Agents can view in-depth listing data beyond what homebuyers see on public sites. This inside information may indicate if a seller’s loan can be assumed.

2. Relationships and Networks

Well-connected agents may leverage their contacts to uncover pocket listings or homes coming soon with assumable loans not yet actively marketed.

I always recommend homebuyers work with an agent familiar with assumable mortgages. Their understanding of this financing option combined with access to broader MLS data empowers you to more readily identify these uncommon loans.

Utilize Advanced Online Search Features

Real estate portals like Zillow and realtor.com have advanced search filters allowing you to zero in on listings using customized criteria. Here are two effective strategies for finding possibilities:

Add Relevant Keywords

Most sites let you enter keywords or phrases into your search parameters. Try terms like:

• Assumable mortgage
• Assumable
• Assume
• VA loan
• FHA loan
• USDA loan

Listings with loans mentioned in the description often indicate they may be assumable.

Select Filter Options

Some MLS platforms have an “Assumable” filter choice under loan options. Selecting this narrows your results to homes with the potential for assumption.

Additionally, toggling on filters for VA, FHA, and USDA loans can further pinpoint loan types with increased assumption possibilities.

Make use of all available filters and keywords to concentrate your search listings with the highest probability of having assumable loans attached.

Leverage Services Tailored to Finding Assumable Loans

In recent years, real estate technology companies have launched services dedicated to pairing homebuyers with properties offering assumable mortgages. I recommend checking out these three options:

Roam

Roam combs through listings to identify homes with low interest rate assumable loans, providing subscribers access to search its database.

AssumeList

This platform lets buyers view loan details like balances, rates, and payments for listed properties with assumable financing. Membership plans give you access to search for 30 days.

Assumable.io

Assumable.io touts itself as a national resource for finding listings with assumable mortgages. The site charges a flat fee for its mortgage assumption processing services.

Tools like these can supplement your online searches, expanding possible hits since they tap directly into loan data.

Search Off-Market Listings

Thus far we’ve focused on homes publicly for sale, but you can also dig into off-market properties not actively listed. Sellers with great rates may not have officially placed their home on the market yet.

Tap into Pocket Listings

Pocket listings are homes sellers have made available through agents but not on MLS. Ask your agent if they have any upcoming pocket listings with assumable loans.

Explore “Coming Soon” Listings

Browse coming soon listings by asking your agent or checking sites advertising these future listings.

Leverage “Make Me Move” Listings

You can let homeowners with assumable loans know you’re interested if the right offer comes along via “make me move” platforms.

Expanding beyond marketed listings exposes you to homeowners who haven’t listed yet but would consider selling if presented with the right terms or price.

Connect with a Specialized Assumption Listing Agent

Real estate agents specifically focused on pairing buyers with assumable loans can offer niche expertise. They may have access to exclusive assumption property databases.

For example, Assumption Solutions is a firm helping buyers find listings with assumable financing. The benefit of professionals like this is deep knowledge around this less common transaction type.

Now That You’ve Found an Option – Act Quickly!

Once you locate a property with an enticing assumable loan, move rapidly to make it yours. These standout listings attract fast interest. Take key steps to stake your claim:

Contact the Seller’s Agent

Connect with the listing agent to share your interest and get insight into assumption eligibility requirements.

Consult with Your Lender

To understand qualification criteria and paperwork needed, speak with the seller’s lender.

Submit Your Application

Get the ball rolling on approval by quickly submitting your assumption application and supporting documents.

Make a Strong Offer

Given demand, expect competition. Make your best offer with attractive terms to incentivize the seller to accept your contract.

Get Pre-Approved

If you need additional financing to cover the seller’s equity, secure pre-approval letters from lenders.

Move Quickly to Close

Work diligently through the closing process to get to the finish line before another buyer seizes the opportunity.

Securing an assumable loan takes perseverance and preparation. But walking away with a lower interest rate and monthly payment is an outcome well worth the effort. Arm yourself with the search strategies and smart tips above to win your quest for an assumable mortgage. The financial rewards for years to come will have you smiling at your success.

So what are you waiting for? With mortgage rates up from last year’s historic lows, now is an opportune time to pursue the savings and convenience that comes with finding and assuming the right loan. Get out there and start your search, the perfect home with the perfect financing is waiting to be found!