Buying

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In addition, we can see the price reductions ticking up each week. They aren’t at a scary level, people are buying homes, but it’s notably softer on pricing than last year at this time. 

Mortgage rates seem to have finally settled down. The Fed met last week and we escaped dramatic changes in the markets. I was worried that we might come out of that meeting with a spike in mortgage rates but that didn’t materialize so we got lucky. 

I like to point out that consumers are more sensitive to changes in mortgage rates than to the absolute levels, and since rates are now basically unchanged for the month, just easing down from the early March peak of 7.2%, sellers and buyers are tip-toeing back into the market. 

As a result, we continue to see the signals that home sales volume will grow this year and prices will be mostly flat. The price appreciation signals last year were stronger than they are now. 

Housing inventory

The available inventory of unsold homes continued to climb last week.

  • There are now 513,000 single family homes unsold on the market.
  • That’s 1.1% more than last week and 24% more than a year ago.
  • Last year, inventory was still declining in March. Now it’s on the rise.

Inventory will cross over 2020 levels by July. We’ll finish the year with over 600,000 homes on the market unless rates reverse and fall quickly. 

Three takeaways from the inventory data now:

1. Growing inventory this year means more sales can happen. More sellers means more sales will happen.

2. Year-over-year inventory growth points to weaker demand and is one of the signals that home prices won’t climb this year. We currently have 24% more homes on the market than a year ago.

3. The longer mortgage rates stay higher, the more inventory will grow closer to the old levels. If you’re a homebuyer and you’re waiting for mortgage rates to fall before you swoop in for a deal, recognize that even slightly lower rates will spur demand more than supply so inventory will start falling and selection and competition will be worse.

New listings 

Each week this spring we’ve been tracking the new listings volume. Last week we saw just over 60,000 new listings added to the inventory with another 17,000 new listings / immediate sales. In total, new listings data is 14% more than last year. April is looking good for home sales growth.

A year with 5.5 to 6 million home sales would need probably 80,000 new listings of single family homes right now. And we have 60,000, so there simply aren’t enough homes for sale to hit the big sales numbers, but the lid is being lifted. We can see obvious growth.

Pendings

As supply increases, the rate of sales is starting to pick up compared to a year ago. We can measure home sales in real time by tracking all the homes that moved to contract pending status this week. These “pendings” aren’t yet sold. They’ll spend 30 or 40 days in contract and the sales will mostly close in April or May.

There were 67,000 new contracts for single family homes this week compared to only 62,000 in the same week last year. There were another 15,000 condos into contract. This annualizes to only 4.3 million home sales, without any seasonal adjustment. So obviously the rate of sales is still pretty slow, which makes sense given the high mortgage rates. But the sales rate is climbing. The rate of new contracts is 8% more than last year but still 15% fewer than March of 2022, when buyers were desperately trying to get their deals done as rates were rising.

It looks like April will see decent home sales growth over 2023 but won’t overtake 2022 sales volumes until after July of this year. July of 2022 was when supply and demand fell precipitously. If mortgage rates stay stabilized in the upper 6s, these trends look durable to me.  

Home prices

Last week, all the current price measures actually had pretty healthy gains. When we look at all the homes on the market, the median price is now $439,000. That is up a fraction this week and just a little bit higher than last year. Home prices climb this time of year before peaking in June as the best inventory, the most new listings, and the best demand is in the market. This week’s price increase is right in the normal range for the end of March. 

The price of new listings took a healthy jump this week, up 1% to $424,900. That’s nearly 4% higher than a year ago. It’s also to be expected that the price of new listings each week in the spring lurch higher. There is no signal of big home price changes in this leading indicator, but it’s nice that this move is up.

Four years ago in March 2022, we were at the start of the pandemic lockdown and we could see the price of the new listings drop very quickly. That price decline only last for three weeks though. And the price of the new listings was one of the important factors that showed us very quickly how there would be no housing crash as a result of the crisis.

The price of the homes going into contract across the country are holding up but also not accelerating.  The median price of the new contracts this week was $389,900 — that’s up a fraction from last week and 4% more than a year ago. Home prices peaked in May of 2022 and didn’t surpass that during last year’s spring season. I expect we’ll hit new all-time highs for home prices in the next month or so, assuming these current trends hold.           

Price reductions

Most of the signals in the data last week were pretty optimistic. If there is one factor to temper than optimism, it’s the price reductions. The percent of homes on the market with price cuts from their original list price ticked up to 31.4% this week. There are more homes on the market now that have felt the need to reduce asking price than there were a year ago. Last year’s market strength in Q1 and Q2 led to 5% home-price growth for the full year of 2023. We have less strength in pricing now than we did last year. 

While price reductions are in the “normal” range, they are higher now than any March in many years. There are more sellers now who have reduced the asking prices on their homes than in any March in over a decade. This last decade was a very strong one for homebuyer demand, so we haven’t seen a “normal” market in a very long time. 

This is a signal to pay attention to. It’s hard to see how home prices will grow nationally this year under these circumstances. We can see buyers in the market, but there is no signal of them pushing home prices higher. Sellers who over-price are being forced to reduce. 

In March 2022, there were still very few overall homes with price reductions, but that was changing rapidly. The slope started to climb very quickly, especially in April and May of that year. The number peaked in November 2022 with 43% of the homes on the market needing price cuts. That November peak corresponded to home sales price declines four to six months later. That’s why this data is worth watching so closely: These price cuts tell us about demand now, which turns into sales several months down the road. 

We can see homebuyers are very sensitive to mortgage rate moves. We can see the price reductions data adjust exactly in the moments that mortgage rates jump higher. 

Source: housingwire.com

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On the heels of the $418 million settlement recently announced by the National Association of Realtors (NAR), mortgage trade group Community Home Lenders of America (CHLA) has called on the U.S. Department of Veteran Affairs (VA) to expedite regulatory change that would allow veterans and active-duty service members to fund buyer’s broker commissions when purchasing a home with a VA mortgage.

In a letter submitted Monday to John Bell, executive director of VA’s Loan Guaranty Service, the CHLA took issue with how the existing regulatory requirements regarding VA mortgages could put veterans and active-duty personnel at an “unfair disadvantage” when buying a home.

NAR’s settlement, which could go into effect as early as July, will eliminate the long-standing “Participation Rule” that requires listing agents to make an offer of cooperative compensation to buyers’ agents. Under the current system, the buyer agent’s commission is baked into the price paid for a home. If the settlement is finalized in its current form, buyers may have to pay upfront flat fees to agents.

The current VA rule states that a borrower using a VA loan cannot pay fees or commissions to a real estate agent unless determined “by the Under Secretary for Benefits as appropriate for inclusion . . . as proper local variances, under current VA regulations.“

“We ask that VA adopt an appropriate administrative remedy to ensure that those who have courageously served this country are not financially discriminated against in their homeownership journey,” the letter reads.

The VA has been monitoring various cases involving real estate broker commissions, including the NAR case, an official told HousingWire.

“VA is working closely with the Department of Justice to determine any potential implications for Veteran borrowers and is committed to ensuring that Veterans are neither disadvantaged in the homebuying process nor overcharged,” the official said in an e-mailed response.

The official added that the VA recognizes that potential changes may be forthcoming in the industry as a result of the proposed NAR settlement.

“VA is actively engaged with the Department of Justice to review the potential implications and evaluate how VA can best ensure that VA’s home loan program remains an attractive option for Veterans in the homebuying process.”

In December, the CHLA sent a letter to regulators and administrators at the Federal Housing Finance Agency (FHFA), the Department of Housing and Urban Development (HUD), the Department of Agriculture (USDA) and the VA warning that homebuyers who must pay broker commissions out of pocket could face further affordability challenges.

“First-time homebuyers, families with lower incomes, veterans, and minority homebuyers could be adversely affected in their ability to purchase a home because of obstacles and complications related to the need to fund the buyer’s broker commission,” the CHLA said.

Source: housingwire.com

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If you regularly drive someone else’s car, you might wonder about buying insurance for it. But when it comes to purchasing an auto insurance policy, the car owner is the one in the driver’s seat. Here’s what to know about insuring a car not in your name.

Can I insure a car not in my name?

No, you can’t insure a car not in your name. In most cases, only a person listed on the car’s registration can get insurance for it.

There may be an exception made if you can prove you have “insurable interest” in the vehicle. To have insurable interest in something, you must have a financial stake in it, meaning that the loss of the car would have a financial impact on you. If you’re not the owner, that can be hard to prove. If you believe you have a legitimate need for someone else’s car, you can try to prove you have insurable interest to an insurer to try to get them to cover you.

If you’re unable to prove you have insurable interest in the vehicle you’re driving, you could:

  • If you and the vehicle owner live at the same address, get an auto insurance policy that covers you both. If you already have auto insurance, add the car’s owner to your existing policy; or have the car’s owner add you to their existing policy, if they have one.

  • Buy non-owner car insurance so you have liability coverage in case you cause an accident that results in damages to others while driving someone else’s car.

How to handle common scenarios

How to be insured while driving

Drive a parent’s car while living at home

You should be added as a driver on your parent’s policy.

Regularly drive a roommate’s car

You should be added as a driver on your roommate’s policy.

Occasionally borrow the car of a friend or relative who doesn’t live with you

The owner’s policy will likely cover you. A standard auto insurance policy usually covers drivers who occasionally use a car with the owner’s permission.

Drive a parent’s car while away from home at school

A parent should list you on their policy and tell the insurance company where you’re going to school.

Drive a parent’s car once you’ve moved out

You’ll need to buy your own policy. Insuring a car at one address when it’s kept at another is fraud. Car insurance rates are based in part on where a car is kept. Also, insurance companies won’t allow you to stay on someone else’s policy and drive their car when you don’t live with them. Your parent could add you to the car title, or sell or transfer the car to you. Then you could register the car and buy car insurance using your own address.

Regularly drive the car of a friend or relative who does not live with you

If you routinely use somebody else’s car, discuss having your name added to the vehicle title so you can buy coverage for it. This is particularly important if this is a car that is no longer being used by the owner and is therefore not insured by them.

Consider non-owner car insurance

If you frequently drive cars that are not yours, you might consider purchasing non-owner car insurance.

If you occasionally drive somebody’s car with permission, the owner’s policy will typically cover you in an accident, up to the policy’s limits. However, any costs related to the accident that go beyond those limits would fall on you. Plus, if the car owner’s insurer decides you drive the car too often and should have been added to the policy, they might refuse to cover the accident. This is why non-owner insurance can be a smart purchase if you regularly drive someone else’s vehicle.

Non-owner car insurance provides liability insurance for drivers who don’t have a car of their own. A non-owner policy’s liability insurance pays for damage you cause to others and their property in an accident where you’re at fault, if the costs from an accident exceed the car owner’s liability limits. Liability insurance can also protect you financially if you’re sued because of a crash.

Source: nerdwallet.com

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It’s entirely possible to sell a house with a mortgage. In fact, it’s common to sell a property that still has a mortgage, because most people don’t stay in a home long enough to pay off the home loan.

With the help of your lender and real estate agent, you can move ahead and sell a house with a mortgage. Yes, there’s a bit of paperwork involved, but settling your mortgage at the closing table shouldn’t prove too challenging.

Here’s everything you need to know about selling a home with a mortgage.

What Happens to Your Mortgage When You Sell Your Home?

When you sell your home, the amount you contracted with the buyer is put toward your mortgage and settlement costs before any excess funds are wired to you. Here’s how it works for different transaction types.

A Typical Sale

In a typical sale, homeowners will put their current home on the market before buying another one. Assuming the homeowners have more value in their home than what is owed on their mortgage, they can take the proceeds from the sale of the home and apply that money to the purchase of a new home.

A Short Sale

A short sale is one when you cannot sell the home for what you owe on the mortgage and need to ask the lender to cover the difference (or short).

In a short sale transaction, the mortgage lender and servicer must accept the buyer’s offer before an escrow account can be opened for the sale of the property. This type of mortgage relief transaction can be lengthy (up to 120 days) and involves a lot of paperwork. It’s not common in areas where values are falling or at times when the real estate market is dropping.

When You Buy Another House

There are several roads you can take when you buy another house before selling your own. You may have the option of:

•   Holding two mortgages. If your lender approves you for a new mortgage without selling your current home, you may be able to use this option when shopping for a mortgage. However, you won’t be able to use funds from the sale of your current home for the purchase of your next home.

•   Including a home sale contingency in your real estate contract. The home sale contingency states that the purchase of the new home depends upon the sale of the old home. In other words, the contract is not binding unless you find a buyer to purchase the old home. The two transactions are often tied together. When the sale of the old home closes, it can immediately fund the down payment and closing costs of the new home (depending on how much there is, of course). Keep in mind that a home sale contingency can make your offer less competitive in a hot real estate market where sellers are not willing to wait around for a buyer’s home to sell.

•   Getting a bridge loan. A bridge loan is a short-term loan used to fund the costs of obtaining a new home before selling the old home. The interest rates are usually pretty high, but most homebuyers don’t plan to hold the loan for long.

💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

Selling a House With a Mortgage: Step by Step

Here are the steps to take to sell a home that still has a mortgage.

Get a Payoff Quote

To determine exactly how much of the mortgage you still owe, you’ll need a payoff quote from your mortgage servicer. This is not the same thing as the balance shown on your last mortgage statement. The payoff amount will include any interest still owed until the day your loan is paid off, as well as any fees you may owe.

The payoff quote will have an expiration date. If the outstanding mortgage balance is paid off before that date, the amount on the payoff quote is valid. If it is paid after, sellers will need to obtain a new payoff quote.

Determine Your Home Equity

Equity is the difference between what your property is worth and what you owe on your mortgage (your payoff quote is most accurate). If your home is worth $400,000 and your payoff amount on the existing mortgage is $250,000, your equity is $150,000.

When you sell your home, you gain access to this equity. Your mortgage, any second mortgage like a home equity loan, and closing costs are settled, and then you are wired the excess amount to use how you like. Many homeowners opt to use part or all of the money as a down payment on their next home.

Secure a Real Estate Agent

A real estate agent can walk you through the process of selling a home with a mortgage and clear up questions on other mortgage basics. Your agent will be particularly valuable if you need to buy a new home before selling your current home.

Set a Price

With your agent, you will look at factors that affect property value, such as comparable sales in your area, to help you set a price. There are different price strategies you can review with your agent to bring in more buyers to bid on your home.

Accept a Bid and Open Escrow

After an open house and showings, you may have an offer (or a handful). Consider what you value in accepting an offer. Do you want a fast close? The highest price? A buyer who is flexible with your moving date? A buyer with mortgage preapproval?

You may also choose to continue negotiating with prospective buyers. Once you’ve selected a buyer and have signed the contract, it’s time to go into escrow.

Review Your Settlement Statement

You’ll be in escrow until the day your transaction closes. An escrow or title agent is the intermediary between you and the buyer until the deal is done. While the loan is being processed, title reports are prepared, inspections are held, and other details to close the deal are being worked out.

Three days before, you’ll see a closing disclosure (if you’re buying a house at the same time) and a settlement statement. The settlement statement outlines fees and charges of the real estate transaction and pinpoints how much money you’ll net by selling your home.
💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.

Selling a House With a Negative Equity

Negative equity means that the value of an asset (such as a home) is less than the balance due on the loan against it. Say you purchased a property for $400,000 with a $380,000 loan, but then the real estate market took a nosedive. Your property is now worth $350,000, less than the amount of the mortgage.

If you have negative equity in the home and need to sell it, it is possible to sell if you come up with the difference yourself.

In this scenario (an alternative to a short sale), you pay the difference between the amount left on your mortgage note and the purchase offer at closing. So in the example above, if you sold the house for $350,000, at the closing, you would need to pay the loan holder an additional $30,000 to clear the debt.

The Takeaway

Selling a house with a mortgage is common. The buyer pays the sales price, and that money is used to pay off your remaining mortgage, your closing costs, and any second mortgage. The rest is your profit.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Who is responsible for the mortgage on the house during the sale?

The homeowner is responsible for continuing to pay the mortgage until paperwork is signed on closing day.

What happens if you sell a house with a HELOC?

When you sell a home that has a home equity line of credit with a balance, a home equity loan, or any other kind of lien against the house, that will need to be paid off before the remaining equity is paid out to you.

What happens to escrow money when you sell your house?

Your mortgage escrow account will be closed, and any money left will be refunded to you.

Can I make a profit on a house I still owe on?

Yes. You can make a profit if the amount you sell your house for is greater than the amount you owe on it, less closing and settlement costs.

Can I have two mortgages at once?

Yes, you can have two mortgages at once if the lender approves it.

Photo credit: iStock/Beton studio

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

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National mortgage rates increased for all loan terms compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans moved higher.

While it’s expected that rates will gradually come down this year, the path might be bumpy.

At its Jan. 31 meeting, the Federal Reserve announced it would hold off changing rates, but could cut rates in the future. At their March 20th meeting, the Fed will update their outlook on rates. Rate fluctuations affect many areas of the economy, including the 10-year Treasury, a key benchmark for fixed-rate mortgages.

“Where the 10-Year Treasury yield goes, mortgage rates will follow,” says Ken Johnson of Florida Atlantic University. “In roughly the last two months, the 10-year Treasury yield is up 50 basis points. Depending on the source, the 30-year mortgage rate is up 48 basis points. Treasurys’ path remains a coin toss at this point.”

Rates last updated March 25, 2024.

The rates listed above are marketplace averages based on the assumptions here. Actual rates listed on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Monday, March 25th, 2024 at 7:30 a.m.

30-year mortgage increases, +0.10%

Today’s average rate for the benchmark 30-year fixed mortgage is 6.98 percent, an increase of 10 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.19 percent.

At the current average rate, you’ll pay a combined $663.96 per month in principal and interest for every $100,000 you borrow. Compared to last week, that’s $6.70 higher.

Use Bankrate’s mortgage rate calculator to calculate your monthly payments and see how much you’ll save by adding extra payments. The tool will also help you calculate how much interest you’ll pay over the life of the loan.

15-year mortgage rate increases, +0.06%

The average rate for the benchmark 15-year fixed mortgage is 6.47 percent, up 6 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $869 per $100,000 borrowed. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.

5/1 adjustable rate mortgage goes up, +0.13%

The average rate on a 5/1 ARM is 6.51 percent, climbing 13 basis points over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for people who expect to sell or refinance before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.51 percent would cost about $633 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage rate goes up, +0.11%

The average rate for a jumbo mortgage is 7.09 percent, up 11 basis points over the last seven days. A month ago, the average rate for jumbo mortgages was higher at 7.24 percent.

At today’s average rate, you’ll pay $671.36 per month in principal and interest for every $100,000 you borrow. Compared to last week, that’s $7.40 higher.

Refinance rates

30-year mortgage refinance climbs, +0.12%

The average 30-year fixed-refinance rate is 6.99 percent, up 12 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was higher at 7.16 percent.

At the current average rate, you’ll pay $664.63 per month in principal and interest for every $100,000 you borrow. That’s up $8.04 from what it would have been last week.

Where are mortgage rates heading?

With inflation still above the Fed’s 2 percent goal and the job market holding strong, the Fed isn’t likely to cut rates at its March meeting.

“The Federal Reserve will not cut interest rates in the first half of this year, in my view,” says Lawrence Yun, chief economist of the National Association of Realtors, “but rate cuts of three, four or even five rounds will be possible in the second half of the year as rent measures will be much more well-behaved.”

The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.

These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.

What these rates mean for your mortgage

While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

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  • Amy Yzaguirre and her husband bought a home in Oregon with a 2.5% interest rate in 2023.
  • The lower mortgage rate, attained via an assumable mortgage, saves them $40,000 over 28 years.
  • Yzaguirre and her husband have used their savings to pay off medical debt and purchase a new car.

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This as-told-to essay is based on a conversation with Amy Yzaguirre, 40, a student and barista. She and her husband purchased a home with an assumable mortgage in Tigard, Oregon, in March 2023. An assumable mortgage allows qualifying buyers to acquire the interest rate, current principal balance, and other conditions of a seller’s existing loan. Not all loans can be assumed. The essay has been edited for length and clarity.

I grew up in the Portland, Oregon, area but moved to Boise, Idaho, in 2017. In 2022, my husband and I decided to move back to Oregon.

My husband had applied for some jobs in Portland and got a position, but we had just refinanced our Boise home. Since we had signed a no-flip clause, we couldn’t sell it until April 2022.

We planned that he would move to Portland and live with a friend while our son and I stayed back and got the house ready to be sold in April. Then, we would join him and buy a house.

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But in January 2022, I was diagnosed with stage 4 non-Hodgkin’s lymphoma. I didn’t want to undergo half of my chemo treatment in Boise and the other half in Portland, so we had to figure out a way to be together as a family while I underwent chemotherapy.

Yzaguirre and her husband in front of their RV.

Courtesy of Amy Yzaguirre



We had to keep the house until April, but we couldn’t afford to pay two mortgages or pay rent and a mortgage. A family friend gave us the idea to buy an RV and live on my parents’ land in Oregon. We lived there for eight months. It was pretty rough, but we made it work.

In March of 2022, we started looking at houses through our real-estate agent. I was in the middle of chemo, but on the days that I would feel good, we would meet up with brokers.

One suggested, “To get the type of mortgage loan that you want, you need to wait until you’re back to work.” So, we decided to pause our home search until then. While waiting, we got our credit in a good spot. When August came around and I got a job, we started seriously looking at houses.

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Finding an affordable home to buy was difficult

We wanted to live in the suburb that my parents lived in, called Tigard, but the area was too expensive for us, and the real-estate market was fairly competitive.

It’s funny how an area can be a nice, family-friendly, affordable place to live, and then all of a sudden, it becomes overpopulated and it’s not nearly as reasonable as it used to be.

We eventually decided to look in the Sherwood area instead. At this point, I had beaten cancer and was in remission. My husband and I were excited that we could take the next step and buy a new house.

We qualified for a substantial loan through our mortgage company, but we didn’t want our monthly payments to be too high. We set our budget for a home at no more than $450,000 — but even that was a bit of a stretch.

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Amy Yzaguirre’s Oregon home.

Courtesy of Amy Yzaguirre



As we looked, we really couldn’t find many homes that checked all the boxes for that amount.

But in September 2022, we found a townhouse that was on the market for $416,000. On a flyer for the home, its seller had written that if we wanted to assume her loan, she was locked in at 2.5%.

That didn’t necessarily draw us in because we didn’t quite know what that meant.

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I was more interested in the fact that it was a 1,500-square-foot townhouse that had everything we wanted, like a backyard, a big garage, and an open floor plan with hardwood floors.

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At the time, I believe mortgage rates were close to 6%. If we had a traditional mortgage, our monthly payment would have been about $3,000 a month. I remember being like, “OK, that’s pretty high, but I think we can make it work. We’re just going to have to be really careful.”

An assumable mortgage was too irresistible to pass up

We told our real-estate agent about the home and asked her what an assumable mortgage was. She said, “You’ll have to talk to our mortgage broker. I don’t really have any experience with that and don’t know what it entails.”

I asked the mortgage broker, and he admitted, “Well, we haven’t dealt with this in probably about 30 years, so I’m not entirely familiar with the process. But essentially, when you assume a loan, you’re taking over the seller’s mortgage. If you qualify, you can adopt their locked-in rate, and you don’t have to pay current mortgage rates.”

He warned us that the seller’s mortgage company was not going to hold our hand through the process. But if we were willing to put in a rigorous amount of work and do a lot of bugging, we should definitely try it because it would save us a lot of money.

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I did the math. The seller was locked in at 2.5%, so if we qualified to assume the loan, our mortgage would be a little over $2,100 a month versus the over $3,000 we would be paying with a traditional mortgage at current market rates. It would save us over $40,000 in the long run. That would give us wiggle room and allow us to continue our lifestyle instead of having to scale back.

It sounded amazing, so my husband and I decided to pursue the loan assumption.

It’s not easy assuming a loan — and it took forever

In March 2023, we purchased our home for $418,900 and made a down payment of $48,000. The home had a 30-year fixed-rate mortgage, with 28 years left on a $383,000 Federal Housing Administration loan.

We worked with Flagstar to assume the mortgage, and they assigned us an advocate. He was really nice and helped us through the process.

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In the end, we ended up submitting over 200 documents, and the process took three full months.

At a certain point, my husband was over it and just wanted to go with a normal mortgage. I had to assure him I could take care of it and that it would all be worth it — we just had to be patient.

Yzaguirre’s husband and son.

Courtesy of Amy Yzaguirre



The mortgage broker we originally spoke to was right — as the company processing the assumable mortgage isn’t making any money, you really have to advocate for yourself, jump in there, and ask questions.

I tell anybody who has asked me about assuming loans that it’s going to take a long time and it will be grueling. The process will humble you in some ways, too, because you start doubting yourself, like, “Am I a horrible financial person? Why did they need so much information? Am I not doing this right? Is there something that I’ve done wrong?”

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But once you get through the process, you should be able to get it.

It just takes time.

The hard work getting the assumable mortgage was worth it

After living in a tiny 21-foot RV, buying a home gave us freedom and a new beginning. It also helped me not feel boxed in anymore.

Amy Yzaguirre and her husband.

Courtesy of Amy Yzaguirre



Even though I was fortunate to have good insurance during chemotherapy — once I hit a certain deductible, insurance covered the rest — and have excellent insurance through my current job, I still had quite a few medical bills to pay off.

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With the extra money we have saved on our mortgage payment, I’ve been able to pay them down.

We also used the extra money to pay off other debt and purchase a Toyota Tacoma with cash — we don’t have a car payment at all.

We’re not living grand or extravagantly, but at least we’re not having to eat ramen every night. Knowing that we worked so hard for this lifestyle and achieved it ourselves, I feel like we’re truly living life to the fullest.

Source: businessinsider.com