Currently, the only loans in the market with a standard qualifying assumption clause are VA, FHA and USDA loans, according to the National Association of Realtors.
How buyers, sellers and realtors benefit
Roam helps sellers, buyers, and real estate agents in today’s challenging housing market, says the company’s founder and CEO Raunaq Singh, who was instrumental in starting the mortgage arm at Opendoor, the iBuyer.
Singh declined to specify the size of his client base.
“It was clear that for the sellers, a large part of what was preventing them from moving forward and wanting to list their homes was ‘I don’t know if I want a bunch of people rifling through my stuff if it’s not even clear the homes are going to sell because the rates are so high,” he says.
Most homes on the platform have a mortgage rate of 4%, though they could be as low as 2% and as high as 5.5%, according to Singh. Buyers will pay 1% of the sales price in the form of closing costs.
Roam estimates there are approximately 4.4 million homes with assumable mortgages that fit their criteria: the outstanding loan is at least 50% or higher and if the outstanding loan amount is between 50-75% loan to value, the rate must be at or below 4%; if the loan to value is 75% or higher, the rate must be at or below 5.5%.
However, locating properties with assumable mortgages remains challenging, as they often go unnoticed, and both buyers and sellers need more information. Roam, which is currently in five markets — Arizona, Colorado, Florida, Georgia and Texas — enables homebuyers to easily search for homes with mortgages eligible for assumption.
The median price range of a home on the platform in these markets is $380,000. For the buyers, the Roam website shows how they could reduce their monthly mortgage payment by close to half compared to purchasing a home at today’s prevailing rates.
For example, a home in Gainesville, Georgia, listed at $350,000 can be assumed for a 3.125% interest rate with a $35,000 down payment. Then monthly mortgage cost would come to $1,359 as opposed to $2,381 at the current mortgage rate of 7.5%
It also could be an attractive option for the agents who are grappling with low transaction levels, and the platform can help generate more sales.
