The Hidden Mortgage Strategy Saving Homebuyers Thousands

In this episode, we break down assumable mortgages and how buyers can lock low interest rates in 2026 by taking over an existing home loan. We cover how assumable loans work, who qualifies, the risks, and how buyers can save on interest and closing costs. You’ll also learn why this strategy is trending again in the 2025–2026 real estate market and how it could help reduce foreclosures.

To explore how assumable mortgages work in practice, we sat down with Christopher Tapia, Principal of Tapia Group with Compass, at Compass headquarters in Boca Raton, Florida. Our discussion focused on how these loans are being used today, who qualifies, and how they may influence distressed sales and foreclosure outcomes.

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Transcript

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small mortgages is to assume and take over somebody else's mortgage literally taking over the next following payment so that borrower is gonna save all that all that interest of all those years that the that the that the the current sellers been paying also taking over that interest rate which is probably half of what it is today and most importantly the buyer will be able to save substantially on the closing cost because you're just taking over somebody else's loan hey everyone I'm Tim Jones with foreclosure.com Today I'm joined with Christopher Tapia with Compass Boca Raton Florida Christopher thank you so much for having us here today thank you for coming today we're gonna be talking about assumable mortgages and how it's gonna affect the real estate market in 2026 Chris so let's dive right in okay absolutely for someone brand new to the idea what exactly is assumable mortgage and why is it suddenly trending again in 2025 man I I I believe Assumo Mortgage is the program to be with right now I mean Assumo Mortgages is to assume and take over somebody else's mortgage so for example if a person owns a property and they're selling it for 600,000 and they have a loan for 400,000 and the rate is 3% and the borrower comes in finds out that the seller is selling a property that has an assumable loan on it I would I told him about the assumable loan and now the borrower is taking over the loan that he currently is in literally taking over the next following payment so that borrower is gonna save all that all that interest of all those years that the that the that the the current sellers been paying also taking over that interest rate which is probably half of what it is today and most importantly the buyer will be able to save substantially on the closing cost because you're just taking over somebody else's loan so you're not really paying closing cost and all these crazy fees like if you were to borrow a buy a buy one or refinancing interest so that's the most amazing thing about having an assumable loan it could absolutely help our borrowers and save them tens of thousands per year in interest wow okay so how realistic is it uh for the average buyer to actually find an assumable mortgage and where can they potentially look for one very realistic at this current time I'm noticing that the actual multi listing service already has a feature on most of the MLS systems that tells you if the property has an assumable loan on it um there's like Rome dot com there's a lot of different synchronized sites out there that that can tell you if the property is in a small loan so yes absolutely uh huge benefit if you can find an assumable loan I would say take it because that will save you tons of money okay so so what type of properties or loan programs typically allow uh assumptions and does this include something like pre foreclosures or distress listings sure it's actually a an assumable loan is only really meant for a primary resident owner it's not for a second home it's not for an investment property it's for someone that has a primary resident or just in general at home that has a low interest rate but the borrower has to be a primary resident borrower you cannot be an investor you cannot be purchasing an assumable loan with a second home with assumable loan it has to be a primary residence in order to take it and and and and take advantage of the of these programs okay can investors take advantage of the assumable mortgage programs absolutely not uh investors are not really allowed to assume a mortgage because the lenders will not allow that okay you only assume a mortgage if the property if the borrower is a primary resident owner only OK OK correct um so what are the biggest risk when taking over an owner existing mortgage mortgage uh there's not that many risks the only risk would be the down payment that you're putting in because if the property is worth 600,000 the loan is 400,000 you're assuming that 400,000 dollar loan the difference is that you have to come out of pocket for the difference unless we find a second bank that would do what is called a he lock based on the equity of the property and they can use that equity as a second mortgage so I don't want to confuse you guys but the majority of times when a borrower looking to assume a loan you would you would have to have at least 20 to 30% in your pocket in order to take advantage of an assumable loan okay that's the risk so having a little bit more have a little bit more money in your pocket in order to take over an assumable loan because assumable loans are first position okay so no one really wants to have a second position so this is the reason why uh the borrower has to come out of pocket with cash got it and again if you guys have any questions regarding US mobile loans you can always reach out to us directly um we're here to really assist and help everyone great so um do you think a student will more meaningfully reduce foreclosure rates by helping underwater distressed homeowners exit their homes faster absolute um eliminated because if a borrower a seller is looking to sell a property and they're allowing them to assume the loan and the borrower takes over that assumable loan it absolutely would help that borrower avoid foreclosing on the property because the new borrower can take advantage of the low interest rate and be able to approve and be able to qualify for the loan got it that was right so yes absolutely it would absolutely help the seller reduce the risk of losing their home because they have the assumable loan in their terms got it okay no thank you this this is great information and and thank you so much for sharing with us today um I think that's all the time we have for today Jake what is yeah is there anything you want to mention to the audience for me then one again if you have any questions any concerns regarding a symbol on and how or how they even work you can always call me directly at 5 6 1 3 0 5 6 7 9 4 you can also email me at Chris dot tapia which is t a p I a at compass dot com and again this is Christopher Tapia with compass you can always reach out to us at any time and please don't forget to sign up for our free foreclosure alerts at foreclosure.com until next time I'm Tim Jones and thank you for watching thank you