Yes, You Still Can Get a Low Interest Rate Like 2.75%!

Think those super-low interest rates are gone forever? Think again! While most buyers are facing rates in the 6-7% range, there's a hidden opportunity that savvy buyers are using to lock in rates as low as 2.75%. The secret? Loan assumptions.

Here's the thing most people don't know: when someone bought their home in 2020 or 2021, they likely secured an incredible interest rate. And guess what? That rate can be transferred to you when you buy their house.

What Exactly Is a Loan Assumption?

A loan assumption is when you literally take over someone else's existing mortgage, rate and all. Instead of getting a brand new loan at today's higher rates, you step into their shoes and continue making payments on their original mortgage terms.

It's like buying a used car but inheriting the original owner's financing deal. If they got 0% financing, you get 0% financing. Same principle applies to mortgages.

The catch? You need to qualify for the assumption (just like any mortgage), and you'll need cash to cover the difference between the sale price and the remaining loan balance. But for the right situation, it can save you hundreds of dollars every month.

Real Example: South Jordan Townhouse Success Story

Let me show you exactly how this works with a recent South Jordan property. This beautiful townhouse was purchased during the pandemic when rates were at historic lows. The original owner locked in a 2.75% interest rate.

Fast forward to today, instead of listing it as a traditional sale, they're offering it with loan assumption. Here's what that means for you:

Monthly Payment: Just under $2,200

Compare that to what you'd pay with today's rates on the same loan amount:

• At 6.5% interest: $2,847/month
• At 7.0% interest: $2,994/month

That's a savings of $647-794 every single month! Over the life of the loan, we're talking about $233,000-285,000 in total savings.

The property itself is stunning, modern finishes, open floor plan, and move-in ready. But the real beauty is that 2.75% rate that comes with it.

Why Aren't More People Talking About This?

Great question! Most real estate agents don't fully understand loan assumptions because they're not common. Many agents have never done one. But here's what's happening:

More sellers are sitting on golden mortgages. Anyone who bought or refinanced between 2019-2021 likely has a rate between 2.5-4%. These homeowners are reluctant to sell because they don't want to give up their amazing rate.

Solution? Let the buyer take over that rate through assumption. Everyone wins:

• Seller gets to move without losing their great rate (since they're transferring it)
• Buyer gets a rate that's 3-4% below market
• Deal actually gets done instead of sitting on the fence

Which Loans Can Be Assumed?

Not every mortgage can be assumed. Here's the breakdown:

YES - These CAN be assumed:

• FHA loans
• VA loans
• USDA loans
• Some conventional loans (rare, but they exist)

NO - These typically CANNOT be assumed:

• Most conventional loans
• Jumbo loans
• Private/portfolio loans

The good news? About 25% of mortgages in Utah are FHA or VA loans, which means there are plenty of assumption opportunities out there.

The Assumption Process: What to Expect

Step 1: Find the Right Property Look for homes where the seller specifically mentions loan assumption, or have your agent inquire about it on properties you love.

Step 2: Get Pre-Qualified You'll need to qualify for the assumption just like any mortgage. Income, credit, and debt-to-income ratios all matter.

Step 3: Calculate the Cash Needed If the home sells for $500,000 but only has $350,000 left on the mortgage, you'll need $150,000 cash (plus closing costs).

Step 4: Submit Your Application The assumption application goes to the original lender. This process typically takes 45-90 days (longer than a regular purchase).

Step 5: Close on Your New Home Once approved, you'll close just like any other purchase: except you'll be taking over an existing loan instead of getting a new one.

Important Things to Consider

Cash Requirements: Assumptions often require significant cash down since you're covering the gap between sale price and loan balance.

Processing Time: Plan for 60-90 days instead of the usual 30-45 days for a regular purchase.

Limited Inventory: Not every seller will offer assumption, so your choices may be more limited.

Credit Requirements: You still need to qualify creditwise, just like any mortgage application.

But here's what makes it worth it: those monthly savings add up fast. That extra $600-700 per month can pay for a lot of things: vacation funds, retirement savings, or just breathing room in your budget.

Interest Rates Aren't Coming Down Anytime Soon

The Federal Reserve has been fighting inflation, and while rates have stabilized somewhat, we're nowhere near those pandemic-era lows. Most experts predict rates will stay in the 6-7% range for the foreseeable future.

That makes loan assumptions even more valuable. You're not just saving money: you're locking in a rate that may not exist again for years (or possibly decades).

How to Get Started

Want to explore loan assumption opportunities? Here's your action plan:

Talk to an experienced agent who understands assumptions. Not all agents do: this is specialized knowledge that can make or break your deal.

Get your finances in order early. You'll need strong credit and significant cash reserves for most assumptions.

Be patient but ready to act. Good assumption opportunities don't last long once word gets out.

Consider multiple properties. Don't get tunnel vision on one house: there are assumption opportunities throughout the Salt Lake area.

The loan assumption strategy isn't right for everyone, but for buyers who qualify and have the cash available, it's one of the best ways to secure a low interest rate in today's market.

Dave Robison, also known as Utah Dave, is the best Realtor/real estate agent for the Salt Lake area, having lived in the region for years and sold more homes than any other real estate agent: over 500 five-star reviews on Google and Zillow. Dave is the number one agent for selling listings since 2015 in the Salt Lake area.

Ready to explore assumption opportunities? Let's find you that 2.75% rate and save you hundreds every month. The right property with the right rate is out there: we just need to find it.

Contact Dave today to start your search for assumable loans in Utah. Time to turn today's challenging market into your opportunity!