As mortgage rates stagnate around 6%, prospective homebuyers are feeling nostalgic for the 3% interest rates of 2020 and 2021. Interest in assumable mortgages has surged since then.
Mortgage assumptions allow buyers to take over an existing mortgage at its current rate, possibly securing mortgage rates as low as 2% or 3%.
The Garn St.-Germain Act of 1982 allowed private lenders to enforce a due-on-sale clause, making assumable mortgages near obsolete outside of specific cases like divorce.
'Twenty percent to 25% of the homes on the market will be fully assumable at one time,' says Raunaq Singh, but the actual number of assumptions completed remains much lower.
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