Save Thousands on Your Mortgage: Assumable Loans
Tired of High Mortgage Rates?
Assumable loans can help you buy a home at a lower interest rate. Join us as Mike Roberts explains the ins and outs of taking over someone else's loan.
In this episode, you’ll learn:
How assumable loans can benefit both buyers and sellers in a transaction.
Which loans are eligible to be taken over and how to do it.
How assumable loans differ from subto or seller financing.
Links:
Contact Mike Roberts to discuss mortgage options - cobaltmtg.com
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Introduction and Welcome
Hello everyone. And welcome to the podcast. I am Michelle Moses, your host. And today we are going to be talking about assumable loans. And we have Mike here to talk with us. Thank you for joining us, Mike. Yeah, absolutely. Thanks for having me. This is awesome. Yeah.
Meet Mike and Yumi: The Assumable Loan Experts
And Mike, uh, started a company. How long has it been?
A little over a year. Okay. A half ago probably is when we started the company. Yeah. Called Yumi. And it is about assumable loans and that's what they specialize in. And you guys, this is pretty exciting because if you are in a, or outside of the market and you are wanting to buy a house, but the interest rates are too high for you, this might be a solution for you because you can assume these low rate mortgages.
And we are going to go into detail about how you can get these.
Understanding Assumable Loans
So let's just start out about what an assumable loan is. Sure. So the, the, what I always like to do, when I explain what an assumable loan is, is first what it's not. And so like, let's say for example, you're a listing agent, you're a realtor.
And it's like those first eight phone calls you get from just what I call TikTok investors that they went on TikTok and they saw that, Hey, I can get something for zero down. I just have to assume the responsibility for this loan. And they call you up and they say, Hey, I'd love to assume your loan, but you're, they're not actually assuming it.
They're doing, remember that subject to wraps and where the seller is still on the hook. This is a totally different market. It is government loans that are mandated by law to be assumable. And what that means is a buyer can come in and as long as you have a qualified buyer and a willing seller. These servicers, which a servicer is just the, the, the current seller's mortgage company, they have to do it.
So they are mandated by law to allow the assumption if you have a qualified buyer and a willing seller. And the assumption is that you are actually taking over the loan. You're not just kind of taking over the payments. Right. Your name goes on the loan with the mortgage company. Yes, key difference between that whole subject to world is the release of liability.
Buyer goes onto the loan, seller comes off of the loan, it's now the buyer's loan. Okay, so complete release of liability, right?
Marketing and Demand for Assumable Loans
And so and I think and that the difference is is that the house needs to be marketed as this right? So you need to know that they're gonna have an assumable mortgage on it I mean, yes, you definitely I mean you want to definitely advertise it as an assumable mortgage Just because there's inherently there's value there to that low interest rate loan, right?
And you've seen so I've taken some of your classes obviously, so you've seen people like clamor for these Like when a listing agent is listing their house and it's like with this as an assumable loan of two and a half percent. I mean people like clamor. They are overwhelmed. The listing agents become overwhelmed sometimes if they're not super familiar with assumable loans and they like you said if it's a two and a half percent interest rate with kind of like a low Delta meaning the difference between the sales price and the loan amount I mean, they get, they're getting offers within hours from like a lot of times investors seem to be very, they catch on quickly.
They're savvy and they're aggressive when it comes to like these, like, I guess you would say incredible deals. Yeah, because they're going to save a ton of money so that they can then rent that house. right? For a lower amount or make more money, really. Because what really cash flows in this market, you know, the interest rates in seven and eight.
It's just, there's no way to really cash flow. Yeah. So it's the only way that they can cash flow is getting some of these lower interest rate loans. Right. Yeah.
Financing and Down Payments
Okay. And so can we go through kind of the, uh, explain the difference? Because I have sent this to some people and said, okay, look, you know, you could get some of these houses, you at, you know, such and such price, um, because on your website it does say, you know, this price is 1, 300 for the payment.
Right. And, um, I do want to take it a step further because you do have to come to the table with the difference between what people are selling it for and what the loan amount is, right? Exactly. Okay. So like in the assumption world, it's totally different than the new financing world. There is no, you don't think of it as like, oh, VA loan zero down FHA loans, three and a half percent down conventional, or 5, 10, 20, 20 5% down.
It's, that's the new financing world, which is not the assumption world. So assumption down payments, they simply are this sales price. So let's say for example, it's 500,000 and the consumable loan amount of 400,000, that means there's that a hundred thousand dollars gap for Delta. So there's, that means it's a hundred thousand dollars down payment, but.
Let's say for example, if you're buying it as your primary residence, there's still some conventional financing sources out there for a second mortgage where you can actually, you can, you can finance it. What is it up to? Well, the reason I stutter a little bit is because there's one out there changing every day, but they are, it's like 5%.
There's one out there for 5 percent down, but I kind of started cause I was thinking, I didn't know if I wanted to announce that because we haven't completed one with that, that, that investor yet. But one that we've completed a lot of is 10 percent down. So that means if. So people would need to at least say, we're going to come with 10 percent down, but you might assume the loan for some of the house.
And then for the other part of the house or the other part of the payment, you could get a second mortgage up to 90 percent of whatever the value of the house is. Like the old days of 80, 10, 10. Right. And then even so, and this is what I think is cool about your website and what you do is that, uh, you run all these illustrations.
And so it's like, even though you're going to assume that and people go, Oh, that second mortgage is so high, you know, what are they at eight or seven or eight or 11? Oh my God. Okay. So even though it's at 11 and who knows when you guys are watching this, it might be even different, but, uh, at 11%, then even though it's mixed, just because it's such a smaller amount at that 11%, then it's still a lower payment than getting a regular mortgage at seven.
Yeah.
Blended Rates and Interest Savings
So we call it like it's the, the, the concept is just blended rates. And really what that is, is just the old high school weighted average. So it's, say for example, you have that 400, 000 loan at 2875, and then you have to get that 50, 000 second at like 11%. That freaks people out, first of all. They're like, 11%?
Oh my gosh, there's no way. But the blended rate on that's probably close to 4%. Right. And you guys, you also need to think about too, that when you're taking over these rates, or over these loans, then you have already paid like, a ton of interest. Like, the other, the seller has already paid all that upfront interest.
And so when you go onto UMI's site and run all these illustrations, it'll show you how much you're paying in interest and how much you're paying towards principal, because you're already like jumping into a loan paying a bunch of principal depending on the age of the loan. That was the part that I was like, okay, yeah, that part is super powerful because if you really run the numbers and could calculate how much an interest you're probably going to save, I mean, you could pay more for your house.
Because you're going to save so much more in interest. That's what I thought was like, just mind blowing. Yeah. We had that specific example of that one house. It was like 765, 000 original loan amount. And when you compared it, the, the assumable loan to the conventional loan, you saved, it was like 720, 000 in interest over the course of the loan.
Wow. There was a story you told that this guy was saving like 34, 000 in interest a year. And so he just That's the one. Yeah. Oh, is it? Yeah. And so he went ahead and paid 34, 000 more for the house. Was it 50 more. Because he was like, that's only a year and a half in interest, and I'm going to live there for how long, you know, so who cares?
Well, he looked at that was like, he basically looked at the interest he was saving from a payment perspective. Right. So that the payment savings was like 1, 800 on that house. That's crazy per month. Yeah, so he's like, this is a lifestyle change Yeah, I mean really you're 1, 500 that 2, 000 a month in savings.
Yeah. Yeah, I think this is gonna be huge I mean, I I really think that as this starts to happen to catch on that, um, the listing agents need to start, you know, like people, if you're going to be listing your house, you really need to check on what kind of loan you have because you might be able to get more for your house.
And then on the other side, if you're buying, you might be able to get into a bigger house or better house or at a better neighborhood or whatever you're looking for than what you were before. Right? That is so true. Because there's what happens a lot of times. Buyers. their, their mentality or thought process.
They think in one thing first, they say, okay, here's a house, right? Here's my payment. If I did new financing, but there's an assumable loan on it. So my payment's going to be smaller, right? So they see that they see that as the advantage, but exactly what you just said, some of them don't think of is, so this is a 500, 000 house for a specific payment that they're qualified for.
But if they took that same payment and they applied it to a more expensive house, And they use that payment. I mean, they're in a whole different neighborhood, a whole different school district Yeah, just with an assumable loan.
Types of Assumable Loans
Yeah, so the type of assumable loans We're talking about can explain the types because not all loans are assumable.
So we didn't really go into that yet. Okay So basically, assumable loans, they're all government loans are assumable. So that's USDA and We don't talk much about the USDA thing because the the the mechanics for Assuming those loans are just they're a little I think janky I guess is the best way to put it and we don't really see too many of them.
So we focus on VA and FHA They're all assumable Now if you go to the conventional side There's only a couple different types that are reasons why conventional would be assumable. You've got a You have conventional arms So you might have, say for example, a seven year arm, but you want to be careful, especially if you're on the listing, if you're a listing agent or you're on the listing side, because if you call into your mortgage company, cause we ran into this.
So a client called into the mortgage company, asked if their loan was assumable and they answered, yes, yes, your loan is assumable. So the agent says, okay, great. We're going to hope, we're going to have an open house, 1. 1 million assumable loan, right? Seven year arm, super excited about it. Garnered a lot of interest.
Well, what happened was. the mortgage company was correct in saying yes, but it wasn't assumable for another six years until they got out of that seven year arm until they're out of the fixed period. Okay, exactly. All right. And that makes sense. Yeah. So you want to be careful. Yeah. Okay. So some are assumable, but you really need to ask your questions, which is why they come to you and make sure that you know, to make sure that it is assumable.
Yes. So would you recommend that agents, if they're going to list the house or a client, you know, if they wanted to list their house and wanted to know, they would call you first to make sure it was assumable? Yeah. Because you know all the companies and Exactly. So one of the things is the first step is obviously to find out if it's conventional.
Hey, is this assumable? There's not many that are, but if you do have a conventional alarm, definitely get with us so we can figure that out. But all government loans are assumable. So again, VA FHA, you already know it's going to be an assumable loan. Well, and you guys, the VA and a lot of people don't, don't know is unless you have a VA loan, I think people know when they have a VA loan, but FHA is usually if you put 3 percent down, right, you usually have an FHA.
Is that kind of a good, yeah, that's kind of a good litmus test for people to remember. Okay. Uh, and I think on the VA loans, everyone remembers that they have those, but a lot of, sometimes, um, the hesitation with those is that they don't, the, the veteran doesn't want to give up. Uh, so we should say a VA loan is for veterans, you guys.
Right. Um, The veteran does not want to give up their loan because they think they won't then be able to go purchase another one. So that is also a rumor, right? That is not, yeah, that's not true.
VA Loans and Entitlement Explained
So can you explain a little bit about that? So basically when you look at, that's probably the only real confusing piece to all of the assumption industry, is a veteran's entitlement and how that works if they allow a non veteran to assume their house.
So the way that that works is, so basically VA benefits are broken up into two things. Eligibility and entitlement. Eligibility, if you think of it as a credit card, eligibility is yes or no, you're qualified for the credit card. Entitlement is for how much. So in a, so let's say for example, a veteran has an original loan amount of 350, 000, right?
And they allow someone to encumber their loan, meaning, assume it, yeah, take it over, and that means their entitlement becomes encumbered, which is just VA's term for tied up. So they're giving away 350, 000 of their entitlement. Credit line, right. Yeah, their credit line. Their credit line. Okay. So they still have some bonus entitlement, so they can go out and purchase another home with VA financing.
It's just under a limited amount. And we have calculators for that. And like any, any of like the, the people watching can get in touch with you or me to figure out what that looks like. So based on what their plans are, even before they list their house, right? Because then sometimes people want to downsize and it doesn't matter if it's encumbered or whatever, because if you're going to make more on your house, right?
You might be able to sell it for more. That might be worth it to have more cash. Because you're letting your entitlement be used by someone else. It's just a matter of getting all the information and making educated decision outside of just a, Oh no, I heard you're not supposed to do that. Right. Exactly.
Yeah. Yeah. And it might be a great way to make an extra, who knows? I mean, that other guy made an extra 50, 000 in his house, right? Yeah. 50, 60, 000 just on, on, on based on the loan itself. Right. Because people want it. If they think they're going to be in the house for a long time, then obviously it's a good way.
And there's no appraisals on assumptions. Right. So, yeah, so that you don't have to, listing agents don't have to worry about the appraisal issues. Buyers don't have to worry about it. Appraising there's no appraisals unless you get secondary financing, that secondary financing, uh, company would, might require an appraisal, but.
Right. The assumable loans don't. Okay. Yeah.
Introduction and Welcome
Hello everyone. And welcome to the podcast. I am Michelle Moses, your host. And today we are going to be talking about assumable loans. And we have Mike here to talk with us. Thank you for joining us, Mike. Yeah, absolutely. Thanks for having me. This is awesome. Yeah.
Meet Mike and Yumi: The Assumable Loan Experts
And Mike, uh, started a company. How long has it been?
A little over a year. Okay. A half ago probably is when we started the company. Yeah. Called Yumi. And it is about assumable loans and that's what they specialize in. And you guys, this is pretty exciting because if you are in a, or outside of the market and you are wanting to buy a house, but the interest rates are too high for you, this might be a solution for you because you can assume these low rate mortgages.
And we are going to go into detail about how you can get these.
Understanding Assumable Loans
So let's just start out about what an assumable loan is. Sure. So the, the, what I always like to do, when I explain what an assumable loan is, is first what it's not. And so like, let's say for example, you're a listing agent, you're a realtor.
And it's like those first eight phone calls you get from just what I call TikTok investors that they went on TikTok and they saw that, Hey, I can get something for zero down. I just have to assume the responsibility for this loan. And they call you up and they say, Hey, I'd love to assume your loan, but you're, they're not actually assuming it.
They're doing, remember that subject to wraps and where the seller is still on the hook. This is a totally different market. It is government loans that are mandated by law to be assumable. And what that means is a buyer can come in and as long as you have a qualified buyer and a willing seller. These servicers, which a servicer is just the, the, the current seller's mortgage company, they have to do it.
So they are mandated by law to allow the assumption if you have a qualified buyer and a willing seller. And the assumption is that you are actually taking over the loan. You're not just kind of taking over the payments. Right. Your name goes on the loan with the mortgage company. Yes, key difference between that whole subject to world is the release of liability.
Buyer goes onto the loan, seller comes off of the loan, it's now the buyer's loan. Okay, so complete release of liability, right?
Marketing and Demand for Assumable Loans
And so and I think and that the difference is is that the house needs to be marketed as this right? So you need to know that they're gonna have an assumable mortgage on it I mean, yes, you definitely I mean you want to definitely advertise it as an assumable mortgage Just because there's inherently there's value there to that low interest rate loan, right?
And you've seen so I've taken some of your classes obviously, so you've seen people like clamor for these Like when a listing agent is listing their house and it's like with this as an assumable loan of two and a half percent. I mean people like clamor. They are overwhelmed. The listing agents become overwhelmed sometimes if they're not super familiar with assumable loans and they like you said if it's a two and a half percent interest rate with kind of like a low Delta meaning the difference between the sales price and the loan amount I mean, they get, they're getting offers within hours from like a lot of times investors seem to be very, they catch on quickly.
They're savvy and they're aggressive when it comes to like these, like, I guess you would say incredible deals. Yeah, because they're going to save a ton of money so that they can then rent that house. right? For a lower amount or make more money, really. Because what really cash flows in this market, you know, the interest rates in seven and eight.
It's just, there's no way to really cash flow. Yeah. So it's the only way that they can cash flow is getting some of these lower interest rate loans. Right. Yeah.
Financing and Down Payments
Okay. And so can we go through kind of the, uh, explain the difference? Because I have sent this to some people and said, okay, look, you know, you could get some of these houses, you at, you know, such and such price, um, because on your website it does say, you know, this price is 1, 300 for the payment.
Right. And, um, I do want to take it a step further because you do have to come to the table with the difference between what people are selling it for and what the loan amount is, right? Exactly. Okay. So like in the assumption world, it's totally different than the new financing world. There is no, you don't think of it as like, oh, VA loan zero down FHA loans, three and a half percent down conventional, or 5, 10, 20, 20 5% down.
It's, that's the new financing world, which is not the assumption world. So assumption down payments, they simply are this sales price. So let's say for example, it's 500,000 and the consumable loan amount of 400,000, that means there's that a hundred thousand dollars gap for Delta. So there's, that means it's a hundred thousand dollars down payment, but.
Let's say for example, if you're buying it as your primary residence, there's still some conventional financing sources out there for a second mortgage where you can actually, you can, you can finance it. What is it up to? Well, the reason I stutter a little bit is because there's one out there changing every day, but they are, it's like 5%.
There's one out there for 5 percent down, but I kind of started cause I was thinking, I didn't know if I wanted to announce that because we haven't completed one with that, that, that investor yet. But one that we've completed a lot of is 10 percent down. So that means if. So people would need to at least say, we're going to come with 10 percent down, but you might assume the loan for some of the house.
And then for the other part of the house or the other part of the payment, you could get a second mortgage up to 90 percent of whatever the value of the house is. Like the old days of 80, 10, 10. Right. And then even so, and this is what I think is cool about your website and what you do is that, uh, you run all these illustrations.
And so it's like, even though you're going to assume that and people go, Oh, that second mortgage is so high, you know, what are they at eight or seven or eight or 11? Oh my God. Okay. So even though it's at 11 and who knows when you guys are watching this, it might be even different, but, uh, at 11%, then even though it's mixed, just because it's such a smaller amount at that 11%, then it's still a lower payment than getting a regular mortgage at seven.
Yeah.
Blended Rates and Interest Savings
So we call it like it's the, the, the concept is just blended rates. And really what that is, is just the old high school weighted average. So it's, say for example, you have that 400, 000 loan at 2875, and then you have to get that 50, 000 second at like 11%. That freaks people out, first of all. They're like, 11%?
Oh my gosh, there's no way. But the blended rate on that's probably close to 4%. Right. And you guys, you also need to think about too, that when you're taking over these rates, or over these loans, then you have already paid like, a ton of interest. Like, the other, the seller has already paid all that upfront interest.
And so when you go onto UMI's site and run all these illustrations, it'll show you how much you're paying in interest and how much you're paying towards principal, because you're already like jumping into a loan paying a bunch of principal depending on the age of the loan. That was the part that I was like, okay, yeah, that part is super powerful because if you really run the numbers and could calculate how much an interest you're probably going to save, I mean, you could pay more for your house.
Because you're going to save so much more in interest. That's what I thought was like, just mind blowing. Yeah. We had that specific example of that one house. It was like 765, 000 original loan amount. And when you compared it, the, the assumable loan to the conventional loan, you saved, it was like 720, 000 in interest over the course of the loan.
Wow. There was a story you told that this guy was saving like 34, 000 in interest a year. And so he just That's the one. Yeah. Oh, is it? Yeah. And so he went ahead and paid 34, 000 more for the house. Was it 50 more. Because he was like, that's only a year and a half in interest, and I'm going to live there for how long, you know, so who cares?
Well, he looked at that was like, he basically looked at the interest he was saving from a payment perspective. Right. So that the payment savings was like 1, 800 on that house. That's crazy per month. Yeah, so he's like, this is a lifestyle change Yeah, I mean really you're 1, 500 that 2, 000 a month in savings.
Yeah. Yeah, I think this is gonna be huge I mean, I I really think that as this starts to happen to catch on that, um, the listing agents need to start, you know, like people, if you're going to be listing your house, you really need to check on what kind of loan you have because you might be able to get more for your house.
And then on the other side, if you're buying, you might be able to get into a bigger house or better house or at a better neighborhood or whatever you're looking for than what you were before. Right? That is so true. Because there's what happens a lot of times. Buyers. their, their mentality or thought process.
They think in one thing first, they say, okay, here's a house, right? Here's my payment. If I did new financing, but there's an assumable loan on it. So my payment's going to be smaller, right? So they see that they see that as the advantage, but exactly what you just said, some of them don't think of is, so this is a 500, 000 house for a specific payment that they're qualified for.
But if they took that same payment and they applied it to a more expensive house, And they use that payment. I mean, they're in a whole different neighborhood, a whole different school district Yeah, just with an assumable loan.
Types of Assumable Loans
Yeah, so the type of assumable loans We're talking about can explain the types because not all loans are assumable.
So we didn't really go into that yet. Okay So basically, assumable loans, they're all government loans are assumable. So that's USDA and We don't talk much about the USDA thing because the the the mechanics for Assuming those loans are just they're a little I think janky I guess is the best way to put it and we don't really see too many of them.
So we focus on VA and FHA They're all assumable Now if you go to the conventional side There's only a couple different types that are reasons why conventional would be assumable. You've got a You have conventional arms So you might have, say for example, a seven year arm, but you want to be careful, especially if you're on the listing, if you're a listing agent or you're on the listing side, because if you call into your mortgage company, cause we ran into this.
So a client called into the mortgage company, asked if their loan was assumable and they answered, yes, yes, your loan is assumable. So the agent says, okay, great. We're going to hope, we're going to have an open house, 1. 1 million assumable loan, right? Seven year arm, super excited about it. Garnered a lot of interest.
Well, what happened was. the mortgage company was correct in saying yes, but it wasn't assumable for another six years until they got out of that seven year arm until they're out of the fixed period. Okay, exactly. All right. And that makes sense. Yeah. So you want to be careful. Yeah. Okay. So some are assumable, but you really need to ask your questions, which is why they come to you and make sure that you know, to make sure that it is assumable.
Yes. So would you recommend that agents, if they're going to list the house or a client, you know, if they wanted to list their house and wanted to know, they would call you first to make sure it was assumable? Yeah. Because you know all the companies and Exactly. So one of the things is the first step is obviously to find out if it's conventional.
Hey, is this assumable? There's not many that are, but if you do have a conventional alarm, definitely get with us so we can figure that out. But all government loans are assumable. So again, VA FHA, you already know it's going to be an assumable loan. Well, and you guys, the VA and a lot of people don't, don't know is unless you have a VA loan, I think people know when they have a VA loan, but FHA is usually if you put 3 percent down, right, you usually have an FHA.
Is that kind of a good, yeah, that's kind of a good litmus test for people to remember. Okay. Uh, and I think on the VA loans, everyone remembers that they have those, but a lot of, sometimes, um, the hesitation with those is that they don't, the, the veteran doesn't want to give up. Uh, so we should say a VA loan is for veterans, you guys.
Right. Um, The veteran does not want to give up their loan because they think they won't then be able to go purchase another one. So that is also a rumor, right? That is not, yeah, that's not true.
VA Loans and Entitlement Explained
So can you explain a little bit about that? So basically when you look at, that's probably the only real confusing piece to all of the assumption industry, is a veteran's entitlement and how that works if they allow a non veteran to assume their house.
So the way that that works is, so basically VA benefits are broken up into two things. Eligibility and entitlement. Eligibility, if you think of it as a credit card, eligibility is yes or no, you're qualified for the credit card. Entitlement is for how much. So in a, so let's say for example, a veteran has an original loan amount of 350, 000, right?
And they allow someone to encumber their loan, meaning, assume it, yeah, take it over, and that means their entitlement becomes encumbered, which is just VA's term for tied up. So they're giving away 350, 000 of their entitlement. Credit line, right. Yeah, their credit line. Their credit line. Okay. So they still have some bonus entitlement, so they can go out and purchase another home with VA financing.
It's just under a limited amount. And we have calculators for that. And like any, any of like the, the people watching can get in touch with you or me to figure out what that looks like. So based on what their plans are, even before they list their house, right? Because then sometimes people want to downsize and it doesn't matter if it's encumbered or whatever, because if you're going to make more on your house, right?
You might be able to sell it for more. That might be worth it to have more cash. Because you're letting your entitlement be used by someone else. It's just a matter of getting all the information and making educated decision outside of just a, Oh no, I heard you're not supposed to do that. Right. Exactly.
Yeah. Yeah. And it might be a great way to make an extra, who knows? I mean, that other guy made an extra 50, 000 in his house, right? Yeah. 50, 60, 000 just on, on, on based on the loan itself. Right. Because people want it. If they think they're going to be in the house for a long time, then obviously it's a good way.
And there's no appraisals on assumptions. Right. So, yeah, so that you don't have to, listing agents don't have to worry about the appraisal issues. Buyers don't have to worry about it. Appraising there's no appraisals unless you get secondary financing, that secondary financing, uh, company would, might require an appraisal, but.
Right. The assumable loans don't. Okay. Yeah.
Practical Advice for Buyers and Sellers
And you guys, a lot of these are just all listed on a website, you know, like I, I should say if they're in the system in the, in the proper way, if they're in the MLS in the proper way, uh, they are on the UMI website and we, you know, you can just go on there and look around at the different areas of town and, um, see if there's, Um, and if something makes sense and it even says, you know, the cash that you need to bring down, bring to closing, um, and if you don't have that cash, then obviously you need to, uh, work with Mike at UMI and, um, see, you know, what you qualify for, right?
Right. See what kind of secondary financing you can get. How can you make it happen? Yeah. I think, I just think credit is so fascinating because there's just so many ways, like once you get into it and you try to start to understand it, there's just so many ways to finance different things. That's you know and people get really overwhelmed, but I think that you know You should just kind of get in there and start learning because it's just by osmosis, right?
You know, you will start to understand it because some people just talk about what numbers their mind just goes Anything, you know, or you asked me to log on to my you know, whatever account But I do think that as you start to learn about some of this stuff I mean the ways that you can get into houses or purchase, you know a great Reconfigure some of the financing is just fascinating to me all the time.
You know, it's been one of the biggest surprises I think in this industry for me is I thought that secondary financing was going to be a huge piece like people need, they have to, they have to get secondary financing to get into these homes, but we probably only have secondary financing on two to three percent.
Really? Yeah, it's. So people are coming with cash. They find the money and. It's, I don't know how they all do it, but they find the money, whether they're taking from retirement because or whatever, we've had some people take from retirement, we've had kids buying and then they're, they're like, their parents are like, Oh, I remember I got an assumable loan back in 88 or something like that.
I loved it. I will give you the down payment if you get this, you know, 2. 25 percent interest rate. Yeah. And so it's, it's just a whole different ballgame when it comes to finding money for this type of thing. Yeah. Well, and I think getting into a home is important because I do have some people, uh, in retirement that don't own, and it really does encumber your options.
Uh, and so I, I realize you guys that getting into a home is very expensive right now and it might seem cost prohibitive, but if you can get a roommate, if you can, you know, buy a tiny little condo and have a roommate, like do whatever you can to just get some equity and to get going. Uh, It just totally pays off later on down the road.
Yeah, because you don't want to be a victim to whatever the rents are when you're 85 years old, right? Yeah. So we've had a lot of actually some like older people or anybody that was looking to pay cash for houses because a lot of people are like, Oh, I'm just going to pay cash, right? They've sold the house somewhere, right?
Get an assumable loan at two and a half percent. Why not come in with it? Sometimes you need a big down payment, but instead of paying like cash for everything, talk to your financial advisor and you know, you're getting debt at two in the twos and threes these days, those financial advisors will tell you all day long.
Yeah. Take the debt. Yeah. right. I can make more money with your money. Yeah. Yeah.
Conclusion and Final Thoughts
If you guys have a low interest mortgage, you really need to check into this assumable thing before you sell your home. If you're thinking about, if you're thinking about listing your home, so yeah, it could bring you a lot of money.
Well, thank you, Mike. Yeah. Thanks for all this information. I really, I think this is going to be a big thing, so I'm glad we sat down and talked about this. Yeah. All right. Thank you everybody for listening and be sure to leave me a review or let me know if you have other topics that you want to listen to.
Thanks.
And you guys, a lot of these are just all listed on a website, you know, like I, I should say if they're in the system in the, in the proper way, if they're in the MLS in the proper way, uh, they are on the UMI website and we, you know, you can just go on there and look around at the different areas of town and, um, see if there's, Um, and if something makes sense and it even says, you know, the cash that you need to bring down, bring to closing, um, and if you don't have that cash, then obviously you need to, uh, work with Mike at UMI and, um, see, you know, what you qualify for, right?
Right. See what kind of secondary financing you can get. How can you make it happen? Yeah. I think, I just think credit is so fascinating because there's just so many ways, like once you get into it and you try to start to understand it, there's just so many ways to finance different things. That's you know and people get really overwhelmed, but I think that you know You should just kind of get in there and start learning because it's just by osmosis, right?
You know, you will start to understand it because some people just talk about what numbers their mind just goes Anything, you know, or you asked me to log on to my you know, whatever account But I do think that as you start to learn about some of this stuff I mean the ways that you can get into houses or purchase, you know a great Reconfigure some of the financing is just fascinating to me all the time.
You know, it's been one of the biggest surprises I think in this industry for me is I thought that secondary financing was going to be a huge piece like people need, they have to, they have to get secondary financing to get into these homes, but we probably only have secondary financing on two to three percent.
Really? Yeah, it's. So people are coming with cash. They find the money and. It's, I don't know how they all do it, but they find the money, whether they're taking from retirement because or whatever, we've had some people take from retirement, we've had kids buying and then they're, they're like, their parents are like, Oh, I remember I got an assumable loan back in 88 or something like that.
I loved it. I will give you the down payment if you get this, you know, 2. 25 percent interest rate. Yeah. And so it's, it's just a whole different ballgame when it comes to finding money for this type of thing. Yeah. Well, and I think getting into a home is important because I do have some people, uh, in retirement that don't own, and it really does encumber your options.
Uh, and so I, I realize you guys that getting into a home is very expensive right now and it might seem cost prohibitive, but if you can get a roommate, if you can, you know, buy a tiny little condo and have a roommate, like do whatever you can to just get some equity and to get going. Uh, It just totally pays off later on down the road.
Yeah, because you don't want to be a victim to whatever the rents are when you're 85 years old, right? Yeah. So we've had a lot of actually some like older people or anybody that was looking to pay cash for houses because a lot of people are like, Oh, I'm just going to pay cash, right? They've sold the house somewhere, right?
Get an assumable loan at two and a half percent. Why not come in with it? Sometimes you need a big down payment, but instead of paying like cash for everything, talk to your financial advisor and you know, you're getting debt at two in the twos and threes these days, those financial advisors will tell you all day long.
Yeah. Take the debt. Yeah. right. I can make more money with your money. Yeah. Yeah.
Conclusion and Final Thoughts
If you guys have a low interest mortgage, you really need to check into this assumable thing before you sell your home. If you're thinking about, if you're thinking about listing your home, so yeah, it could bring you a lot of money.
Well, thank you, Mike. Yeah. Thanks for all this information. I really, I think this is going to be a big thing, so I'm glad we sat down and talked about this. Yeah. All right. Thank you everybody for listening and be sure to leave me a review or let me know if you have other topics that you want to listen to.
Thanks.
Disclaimer: The information provided in this podcast is for general informational purposes only and should not be construed as professional financial advice. Always consult with a qualified financial advisor or professional before making any financial decisions. The hosts and guests of this podcast are not responsible for any actions taken based on the information presented.