Homebuyers are beating high interest rates with assumable mortgages

MINNEAPOLIS — Last year, after Deb Jerikovsky’s husband died, she decided to swap the lake home where they planned to spend retirement for a house in the metro that’s closer to family.hovering near 7% last October

At the end of 2020 and into early January 2021, rates fell to record lows, hovering around 3% for much of 2021 and causing home sales and prices to soar. That buying binge locked in thousands of mortgages at rates that likely won’t be that low again for decades. An estimated 80% of all VA mortgages, like the one Jerikovsky assumed, now have a rate that’s less than 4%, and many of those rate-holders are now ready to sell..

“It’s a huge opportunity,” Carrillo said, nothing that traffic to the site has doubled every month since its launch. That equity gap is often the biggest hurdle. Because the buyer is essentially taking on the existing mortgage rather than receiving a new one, the buyer has to pay the seller the difference between the original mortgage balance and the current asking price.

He said while any lender or servicer should be able to complete the transaction, it helps to work with professionals who are familiar with the process.

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