One of the biggest struggles of the past couple of years has been the stasis and whiplash we’ve seen in the real estate market, brought about by the so-called lock-in effect — a killer combo of higher interest rates and low inventory. The market moved rapidly during the pandemic, then ground to a halt because homeowners were unwilling to sell and trade their pandemic-era low-interest mortgages for higher rates. Buyers have been deterred by a deal-killing combo of high rates, historically high home prices, and a lack of choice in many markets.
I’ve written about this before, calling on lenders and industry analysts to come up with alternative financing options to help agents get deals done so buyers can buy and sellers can move on to the next chapter in their lives. At the time, I got a lot of pushback from folks in the comments and on my social media channels (who often admitted later they hadn’t read the article, just the headline).
Commenters said nothing could be done and that there was no way to improve the lending environment for buyers. I just don’t believe that. This commitment to the status quo and the lack of innovation is what got us here in the first place.
One of the options I’ve long advocated for is assumable mortgages, where the buyer takes on the mortgage — and accompanying interest rate — of the seller, and I still think it’s a good idea.
At a time when 71 percent of agents can’t get a deal done because of affordability issues tied to high mortgage rates, it’s time to get out there and make your own luck. Assumable mortgages can help you do that by turning back the clock to the 2 percent to 4 percent mortgage rate era.
‘Hope is not a strategy’
I recently spoke with Raunaq Singh, CEO of Roam, a portal-style platform designed to help identify homes with assumable mortgages. Like me, Singh is frustrated by the vague advice agents are given, like that of one industry leader who told agents they need to “shake more hands” to get deals done, which he calls “wishful thinking.”
“Hope is not a strategy,” said Singh, “and a lot of people are not even adjusting to the realization that ‘higher for longer’ could be the predominant theme and reality of interest rates. High interest rates are decimating the ability for the majority of homebuyers to afford their monthly payments. There’s also macro context from this; If you were to zoom out on the 40-year horizon for interest rates, actually 7 [percent] is a pretty normal stasis point. In the 80s, [rates] hovered around 15 percent or 17 percent.”
“What are the real options to make housing more affordable? You’re not going to have tens of millions of homes with net-new supply kick off in the next five years that could potentially bring down prices,” Singh said. “And if you’re a real estate agent, you might be out of business in the next five years before the macro resets. So you really need to think about what are the options ahead of you, especially ones that are not cost-inhibitive.”
Assumable mortgages are a win-win-win solution
For sellers, assumable rate mortgages have become a value-added marketing tool that’s far more important to the deal bottom line than many of the home features we generally include in a property description. For most buyers, the monthly payment is all they’re truly fixated on. The affordability impact of an interest rate that’s less than half of what they’d get for a new loan origination is massive and can cut their monthly payment in half — making the purchase possible in a way it wouldn’t be at 7 percent or more.
For real estate agents, the ability to educate the consumer about this option is a powerful value-add that shows expertise and empathy for the challenges their clients are facing. It allows agents to come from a solutions-oriented place rather than throwing up their hands and waiting for rates to come down and boost the market. It also shows your buyers you know more about the details of local homes on the market than any other agent they may have considered working with.
Secondary financing to bridge the gap
The value-add that Singh’s company offers is providing access to secondary financing to close the equity gap. Roam also offers a protection plan so that if it takes longer than 45 days to close, Roam will step in and pay the seller’s mortgage until closing, limiting seller liability or exposure and protecting the deal participants’ timelines. From a credit perspective, Roam files for a release of liability on the loan, ensuring that any subsequent payments the buyer does or doesn’t make will not touch the seller’s credit.
One of the primary challenges when working with assumable mortgages is bridging the gap between the seller’s remaining loan amount, which is assumed by the buyer, and the equity compensation that’s owed to the seller. Singh gives the example of a $500,000 purchase price with a $400,000 remaining loan balance. This leaves a $100,000 equity slug. If a buyer is able to put down 10 percent, or $50,000, they end up getting the rest of the balance at 10 percent blended financing — 3 percent or so on the assumable with a higher percentage rate on the secondary loan.
Now contrast that with a so-called zero-down loan product where the base loan is 7 percent minimum and the secondary bridge loan is significantly higher. There you may end up with a blended interest rate of 16 percent or more. I don’t know anyone this is a great option for.
“Also,” Singh adds, “you’re stepping into the part of the mortgage that’s juicy. Now that’s a bit more of a nuanced take, but you’re stepping into the equity instead of the interest, which is the early part of the mortgage life cycle.”
In addition, because the appraisal already occurred on the assumable, and the secondary mortgage, if it requires it, will be conducted via an automated valuation model (AVM), you can significantly cut down on the time and uncertainty associated with the appraisal contingency.
You also don’t need lender’s title insurance, according to Singh, because the existing title insurance stays with the current loan even if the property transfers. “I recommend everybody get owner’s title insurance for peace of mind,” Singh said, “but lender’s title insurance doesn’t need to be instrumented again. They already did the lien search when they originated the loan.”
So how can agents implement assumables as a differentiator?
First, create a conversation around assumables to win listing appointments. Tell sellers you know how to use their current mortgage as the greatest selling feature they’d ever have. Always ask what type of loan the homeowner has or do the research and find out if it’s an FHA, VA or USDA loan that can be transferred. “Sellers innately understand there’s a value to their low-rate mortgage, but they don’t know how to monetize it,” Singh said. Your job as the listing agent is to help them understand this.
If you’re the only listing agent who shows up at a listing appointment and discusses the marketing impact of assumables and how they’ll bring in more buyers and lead to the sales price the seller is looking for, because you’re the only one who knows how to monetize the benefit, you’re going to win the listing.
To stay ahead of the market, agents can leverage a lead generation and data aggregation tool like Scout to identify homeowners with assumable mortgages. By highlighting the unique value of their listing, agents can engage these sellers and create opportunities for direct outreach.
“This is a chance for agents to showcase their expertise and become the go-to resource in their market,” says Drew Fabrikant, founder and CEO of Scout. “By helping homeowners uncover hidden value in their property — something they may not even realize they have — agents can spark meaningful conversations and position themselves as the trusted local expert and win the deal.”
“The sheer volume of assumable loans in major cities presents a massive untapped opportunity for agents,” Fabrikant said. “Chicago has nearly 47,000 assumable loans, while Miami has over 27,000 — these aren’t just numbers, they’re opportunities hiding in plain sight.” Here are some numbers courtesy of Roam’s internal analytics in cooperation with Glenn Hall at SFR Analytics:
- Availability: There are $1.4 trillion worth of fully transferrable FHA/VA mortgages, more than five million homes, and they have an average interest rate of 3 percent.
- Benefits: Typical sellers who include their assumable mortgage net a 5 percent higher sales price, and the typical buyer saves $325,000 over the life of their loan.
- Impact: If all listing agents with an assumable property listed in 2024 had known their listing’s marketing advantage, sellers would have netted $10 billion in extra proceeds (not to mention avoiding de-listings). Similarly, if all buyer’s agents who purchased an assumable listing in 2024 knew of the monthly payment benefits, their clients would’ve saved $162.5 billion over the life of their loan.
This spring is the perfect time to be obsessed with solutions
The spring and summer 2025 market is the absolute perfect time to become the most solutions-oriented agent you can possibly be. Stop throwing up your hands and saying there’s no way to do more business this year and that you’re at the absolute mercy of market conditions. Stop threatening to throw in the towel on your real estate career. Differentiate yourself and your service by becoming obsessed with finding solutions.
Whatever you do, you must differentiate yourself. If not assumables, become an expert in down payment assistance programs. Become an expert in other forms of alternative financing. The point is to create answers that get people excited about real estate. I guarantee that will translate into excitement about you and the service you provide — and that’s how you build a self-sustaining repeat and referral business and a stellar professional reputation.
Troy Palmquist is the founder and principal at HomeCode Advisors. Connect with him on LinkedIn.
