In this conversational interview, Speaker A explains how assumable mortgages—where a buyer takes over an existing loan—have re‑emerged as a solution to today’s affordability crunch caused by high interest rates and limited housing inventory. The discussion covers why these loans fell out of favor when rates were low, why they are returning now (regulatory changes, lender departments reopening, and market stagnation), and who benefits most (first‑time buyers, renters, families helping relatives, and veterans with VA loans). Concrete financial examples illustrate the monthly‑payment gap between a 3% and a 7% loan on a $500,000 home, showing roughly $1,000‑per‑month savings. The mechanics of the “gap” down‑payment, the reduced remaining term of the assumed loan, and the ability to close in 45 days with the right team are detailed. Regional availability is highlighted, noting about 20 suitable properties in the speaker’s zip code and a few hundred in the Colorado Springs/VA market. Finally, Speaker A warns that the window for exploiting low‑rate assumable loans is short—approximately 1.5‑2 years—after which they will likely disappear as rates fall, urging viewers to act quickly despite the stigma and limited public marketing.
Chapters
0% down with 3% interest rate, sometimes lower. If there's ever something that you needed to take action on, it's this. A little screen recording and then edit it. Yeah, just hold the camera.
It's not a bad idea. Yeah, you know, you're like scrolling. Yeah, just like tell me a little bit about the— tell me a little bit about the assumption loans.
So the power of the assumable loan, especially right now, is that interest rates are so high, right? Like affordability is super high because we had a run-up in prices for so long, like an 11 or 12-year run-up in prices and valuations on property, right? And the government increased the funds rate to slow down demand and to fight inflation basically. But they did it at such a quick pace that the market kind of came to a screeching halt. And a lot of people thought that, oh, prices are gonna dive, prices are gonna plummet. Now they have been, I would say, normalizing and leveling out, but they're not shooting downwards because we don't have enough inventory. There's still a lack of inventory and there's still a supply and demand issue.
Totally.
Right now, assumable loans weren't really, they didn't really exist and they weren't happening for the last like 10 years or so because we had such good interest rates, right? They were in those 3%, 4%, whatever it is. So people were just getting new loans instead of assuming one. Plus the lenders, it's not really lucrative for them to do an assumable mortgage because they're not making new money on that loan, right? You're assuming the loan that's in place. So let's say it's been in place for 5 years. Instead of a 30-year mortgage, you're assuming a loan that has 25 years left on it.
Wow.
The reason why they're coming back right now, and they've come back for the last like year, year and a half or so, is because the market has kind of been at that standstill. People are still buying and selling homes, right? Like you purchase homes because you have big needs in your life. You're adding someone to the family, someone's left, kids have left, there's been a death, unfortunately, marriage, those things. So people will still buy and sell. It's just happening at a slower pace. So these assumable loans are coming back. A lot of these loan servicers started to build these departments back up, which is for the loan assumptions. Because those departments kind of didn't exist for the last 8, 9, 10 years because they didn't have to do them. But now there's regulations, different things happening to where loan servicers are required to have those departments. They're required to answer the phone and move these things along. So it's become much easier, but there's this stigma in the market that, oh, loan assumptions, don't do them, stay away from them. They're hard, they're difficult, they take a ton of time. Real estate brokers will tell them that they're difficult and to kind of stay away from them because they take 6 months. All of these different things are happening in the market, so people kind of shy away from them, right? But that's not the case. I've done several of them, and if you're working with the right team, if you're working with the right companies, you can have them done within 45 days. In fact, we can get them done guaranteed within 45 days as well.
So these are low-interest loans. And who does it most benefit to get into something like this? Who would be some of your ideal people that you would say this probably fits really well?
Honestly, I think the first-time home buyers, right? People that the affordability issue has impacted the most, where that demographic has typically been people that are you know, 26 years to 35 years old is that first-time home buyer demographic. Now that number has been pushed upwards in these last several years.
Yeah.
It's been pushed much higher. And now most of those purchases have to have someone else in the family kind of come in and bring equity for them to be able to purchase. So it hugely affects them because they're able to assume a loan with one of those mortgage rates that they missed, they think they missed out on, right?
Mm-hmm.
And the 3%s, the 4%s, Even the 5% right now would be a lot better than where we're at. So it's mainly for that demographic, but for anyone that is looking to own their own place, maybe they're renting—
And would like the low interest rate.
Yep. And they would like the low interest rate.
So I've always been kind of curious, like how much does a, say a 3% interest rate differ from a 7.5% interest rate in terms of a monthly payment?
It's huge. It very much depends on the principal amount. On a $500,000 home with a 7% interest rate, that payment's going to be— and we're just assuming the same taxes, the same insurance costs on both scenarios.
Sure.
That payment's going to be about $3,000, $3,100 per month, right? At 7%. That's with a 20% down payment, $100,000.
Okay.
Now, if you were to get that same property at the 3% interest rate, nothing else changed. Down payment's the same, taxes and insurance are the same. That purchase or that monthly payment is going to be about $2,000 per month.
Wow.
Just a little bit more, $2,023. So it's about $1,000 a month decrease in monthly payment.
I mean, that makes the difference to whether I can even get into the property or not.
Yeah.
So you're saying there are properties like this that are out and available right now?
There are.
Really?
There are. Yep.
And these things aren't marketed heavily to the public?
So not really, and not in a good way. And there's several factors for that. So in our MLS, we can mark—
Then it's not illegal, right?
No, not at all. No, it's completely legal. You're taking over someone else's mortgage. It works just like a normal transaction.
And how many of these properties do you think are in, you know, the Denver area, just to put into perspective, maybe Fort Collins to Colorado Springs?
Um, that's a big— that, that's a big area. I would say Just in like my zip code alone, kind of looking around in a couple zip codes around it, there are about 20 that would be good options. Now, if you look in Colorado Springs, which has multiple military bases, many more VA mortgages, VA loans that are assumable, there's many more than that, probably a couple hundred opportunities like that.
Wow.
And not all of them are this perfect scenario of 3%, right? There are some in the 4s and the 5s, but there are many in that 3%, some even that are under 3% in that 2.7, 2.65. Those are rare, but they do exist. And then an important distinction between an assumable mortgage and a new loan, a new mortgage. So on a new mortgage, you have your down payment, which is the amount that you bring to the table to purchase the home that shows the lender, you know, that you have good faith in the purchase. It's also going to reduce your monthly payment. If you have 20% down payment, it gets rid of your private mortgage insurance, which is just, it shows that you're less of a risk to the bank, to the loan servicer. Right now, when you assume a loan, you have what's called, it's like the gap. So it's still a down payment and it's essentially covering the gap of what the purchase price is going to be and how much is left on that loan.
Okay.
So for example, on that $500,000 loan, let's say that I was selling it with an assumable mortgage at that 3%, and I was asking for $500,000, and there was $400,000 left on the loan. Now that gap for you to purchase it would be just like a $100,000 down payment on a new loan. You would bring the $100,000, you would assume the $400,000 loan and the 3% interest.
So this is special for not only people that are in maybe like financial hardship or just having difficulty getting into their first home. But this is also special for people that are interested in getting back into a property, but not at all interested in a 7% to 8% interest rate where those mortgages are at.
Absolutely.
And those might be the older generation people that have that liquid capital sitting around.
Absolutely. Absolutely. Okay.
Yeah.
Even if it was somebody that wanted, or even if it was somebody that did have some capital and they wanted to help a family member get into a property, that family member could learn about this process and they could assume the loan and they could get gift funds from a family member to accomplish this if there is a gap that they're unable to pay. But the beauty of it is, is that they're able to assume that low interest rate. And not only that, they're able to assume the mortgage that has less years left on it. So instead of getting a new mortgage at the 30 years or whatever you decide to do, yeah, you're taking over whatever is left on that mortgage. So you're that much closer to it being paid off. Right. And you're that much further along towards paying more principal than interest on the loan. So it's, there's many, many benefits to it.
So it seems like this might be like a sort of a special pocket in time of when these are readily available? Do you have kind of maybe a timeframe of what you think the market is heading toward? Do you think these will be around forever? What do you think?
Yeah, absolutely. So honestly, I should have pushed this probably a year ago and started it, but it's okay 'cause we're starting it now and giving information to people and trying to help people. I think I can't predict the market. When interest rates were in those 3s and those 4s, these were pretty much unheard of in a lot of situations. Unless they were in areas where the market was just really, really slow and they had to turn to doing a loan assumption. So as interest rates come down substantially, I think they'll start to disappear. So my guess would be maybe a year and a half, 2 years that we'll be able to really take advantage of things like this. So I think it is a short window and I think it's a huge opportunity for people.
So going away quickly, Potentially getting into— well, you've got a couple different people that could really benefit off of this. People who just really want to get into a property for a low interest rate. And then also people that can't afford a $3,000— say it's a $500,000 house, $3,000 a month mortgage, because $1,000 in difference. I mean, you're talking— that's massive.
It's significant. It's substantial, right? It's like, Right now, we're seeing different news articles about, oh, it's becoming less expensive to rent than to own the home, right? And it's because of that interest rate. It's still great to own the home. It's like a forced savings account, right?
Yeah.
You're not paying the landlord, you're paying down the principal and the interest, you're building equity. We're still seeing like 5% appreciation nationally. So it's still a great investment. But the spread between those rental averages and owning the home has increased.
Yeah.
So if you're able to do this and, you know, a lot of people have FOMO of the 3% interest rates, the 4%. The thing is, you can have it right now. You can get it.
Right.
But there's no information about it.
Right.
A lot of people, a lot of realtors haven't done it, so they're not experienced. They're a little scared of it. Lenders aren't going to tell you to go that route. So it's possible to have zero money down and to assume a loan with 3% interest.
