A New York startup company said it is now offering a platform that will make it easier for homebuyers to assume a mortgage from the seller, potentially saving buyers significantly over current interest rates.
Roam, as it’s known, launched last week with $1.25 million in seed funding, founded in part by former Uber operations executive Raunaq Singh, the New York Post reported.
Assumable mortgages were once common in real estate transaction, but fell out of favor as home-loan interest rates remained historically low for years – until 2022 when the Federal Reserve raised rates as a hedge against inflation. Current rates are above 7% for many mortgages, double what they were a few years ago.
Through Roam, buyers can secure mortgages at rates as low as 2%, according to Roam’s website. Roam will take a 1% fee from the buyer’s closing costs. The firm plans to target more than 4 million homes in Georgia, Florida, Texas, Colorado and Arizona.
All mortgages are not open to the plan. Most Loans handled by the federal government through the Federal Housing Administration or the Department of Veterans Affairs are assumable, the Post noted. But those backed by Fannie Mae and Freddie Mac, the quasi-government secondary buyers, are not eligible, HousingWire news outlet reported
And loan servicers are currently limited in how much they can charge, which could keep many away from the program, according to HousingWire.
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