A husband-and-wife real estate team in Alexandria have launched a new site to help homebuyers find often lucrative assumable mortgages.
An assumable mortgage allows a buyer to assume the rate, repayment period, balance and other terms of the seller’s mortgage. For homebuyers, it can be a way around high-interest rates, but the trick is finding them.
The website AssumeList was built after the local real estate agents Michael Lorino and Bethany Stalder found that there was no easy way to track or find assumable rate mortgages.
Lorino said home buyers today are likely looking at 6.25% or 6% interest rates.
“Generally speaking, for every 1% change in the interest rate in a mortgage, that translates into a 10% change in a monthly mortgage payment,” Lorino said.
Some assumable mortgages, however, can come with interest rates of 2.5-3%.
“I would be able to assume that mortgage and buy that house with existing loans,” Lorino said. “As a buyer, that’s huge for me because I’m saving 35% a month.”
Lorino said any government back loans are assumable. Most notably, for this region, that includes loans backed by the United States Department of Veterans Affairs. Lorino noted that those loans can be assumed by anyone, meaning they can be transferred to non-military veterans.
“In this area, we obviously have a higher concentration of military families,” Lorino said. “We have a higher concentration of homes that are assumable in this market compared to places in the midwest.”
Lorino said it’s a fairly unique market in that around 10% of homes in Northern Virginia have assumable mortgages.
“In Alexandria there are 233 homes for sale right now, not including those under contract,” Lorino said. “My guess is: about 25 or so of those have an assumable mortgage.”
Lorino said the concept for the website started around a year and a half ago when interest rates started increasing.
“We work with a lot of military families and were saying ‘why take out loans at 6% when these rates are lower?’ Lorino said.
Lorino said he went through various search functions real estate agents use, but there was no way to search for assumable mortgages.
“I said ‘heck, if there’s no way to search for them, why not build a search tool?'” Lorino said.
Lorino said the platform takes aggregated data from public records and private data aggregated from other data repositories to identify mortgages on properties.
“You can identify mortgages on properties, that’s reported in the public record,” Lorino said. “Not even all listing agents know their home has an assumable mortgage.”
The website currently covers parts of:
- California
- Delaware
- Florida
- Maryland
- New Jersey
- Pennsylvania
- Virginia
- Washington D.C.
- West Virginia