PHOENIX — Owning a home has always been part of the American dream but for so many it's becoming more of a distant thought with inflation adding insult to injury. Record high interest rates and a roller coaster real estate ride have homeowners weighing all their options, ultimately hoping to buy.
One avenue that allows buyers to slip into low mortgage rates is something called assumable loans previously taken out by a seller.
This option gives everyday people like Joe Zielinski the opportunity to buy instead of rent. In fact, he's just now unpacking his new three-bedroom, two-bath Buckeye home.
"I'm already looking at little, small changes that you can make to your own home that you can't make in an apartment. I wasn't able to buy a house in KC, I was in an apartment, I was paying over $2,000 a month in rent but apartment living just isn't for me," Zielinski told 12News.
He shared that the opportunity to buy was possible through an assumption loan.
"It was a 2.9 percent interest rate, so I had more than enough to get the gap payment and assume a $1,520-a-month mortgage. This is with taxes and everything," Zielinski added.
Real estate agent Mike Mazzucco said the latest emerging opportunity in the real estate market helps tackle affordability and there's plenty of variety to choose from.
"A loan assumption, basically there are certain loan types that are eligible where a buyer can take over that loan from a seller and the key benefit there is they get to utilize the same rate they have on an existing loan. 28 percent of all houses on MLS listings have either FHA or VA loans, which are assumable," Mazzucco explained.
Plus, there are perks for both buyers and sellers.
"The affordability is the big thing, there's so many buyers that have been locked out of the market facing 6 to 7 percent interest rates. This is a way they can offload their loan without short selling or foreclosure," Mazzucco added.
Just last month, their team closed five transactions with buyers bagging rates as low as 2.55 percent, numbers we haven't seen in years.
"Every single one that we closed was $1,000 a month in savings, the best one we had, that buyer was saving $3,000 a month, obviously a higher-end property but it adds up really quick," Mazzucco said.
Zielinski is now able to move into a house he can make a home.
"It was a game changer because if I would have just bought the house on a conventional loan it would've cost me an extra $1,200 a month."
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