How To Lower Your Mortgage Rate With Assumable Loans

By Philip Kang

Philip Kang is the visionary team leader of the HomeReady Team, based in Orange County, California. Since founding the team, Philip has driven rapid growth year after year, with the team on track to close over $150 million in real estate volume in 2025.

Can you buy a home with a mortgage rate under 3% in 2025? It might sound like a fantasy when today’s rates are hovering around 6% to 7% rate, but there’s a workaround that more buyers and sellers need to know about: assumable loans.

Assumable loans are one of the most overlooked financial moves in today’s real estate market that can save you hundreds of thousands of dollars over time.

What’s an assumable loan? An assumable loan lets a buyer “assume” the seller’s existing mortgage terms, including their interest rate. That means if a seller locked in a low rate of 2.875%, a buyer can take over that rate instead of applying for a new loan at our current 6.75% to 7% market rate.

Here’s how one of our clients got over $635,000 in savings with an assumable loan. Our homebuyer was looking at a home on Paseo and asked if the property had an assumable loan. It turned out the seller, a VA loan holder, had a 2.875% rate.

Compared to today’s average mortgage rate of 6.75%, there’s a huge difference in long-term costs. For a $750,000 loan, the buyer would save over $635,000 across 30 years by assuming the seller’s loan instead of applying for a new loan.

Why aren’t more people doing this? It’s because not all loans are assumable, and not all sellers advertise this option. That’s how we can help you. We have a strategy and tools to help you find neighborhoods where assumable loans exist, even if those homes aren’t on the market yet.

If you have a target area in mind, we’ll help you identify which properties could offer these kinds of savings.

Are there other options available aside from assumable loans? While assumable loans are a huge opportunity, there are other ways we can help our clients take advantage of this market:

• Grant programs through City National Bank
• Seller credits that can be used to buy down interest rates
• Full breakdowns of monthly payments (including taxes, HOA, and more)

If you want a personalized breakdown of how an assumable loan could affect your buying power, or you just want to explore alternative financing strategies, connect with our team.

Whether you’re looking to buy or sell, we’re here to help. Visit our website at FullertonHomeValues.com.

You can also reach out to us if you have questions or need assistance. Contact Caroline Lee at (213) 505-5141 or caroline@homereadyteam.com. You can also reach me at (714) 451-4543 or phil@homereadyteam.com. Let’s take a closer look at what’s possible for your next move.