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- Gavin Carter bought a home in Maryland in May with a 3% interest rate.Carter purchased the home with an assumable mortgage, a relatively rare financing method.By assuming the home seller's mortgage, he inherited their lower rate and monthly payment.
This as-told-to essay is based on a conversation with Gavin Carter, 42, who owns an auto repair shop. In 2025, Carter purchased a home with an assumable mortgage in Maryland.
An assumable mortgage allows qualifying buyers to acquire the interest rate, current principal balance, and other conditions of a seller's existing loan. Not all loans can be assumed.
The essay has been edited for length and clarity.
I'm a small-business owner; I own an auto shop. I live in a suburb of Maryland. The real estate market here is very competitive, and home prices have gone up a lot in the area. In 2019, I purchased a 1,932-square-foot home for $342,000, and it was recently appraised for $533,242.
Earlier this year, my wife and I split up, so I needed to move out of that home. I was in a very specific situation because my kids are still in school, and I wanted to stay close, so I was very limited in the area where I could buy a home.
I had been looking for a property I could either rent or buy for two months. I eventually found a home in a nearby neighborhood that was built in 1986.
It has four bedrooms, two bathrooms, a pool, and sits on three-quarters of an acre. It also came with an assumable mortgage, which was very appealing to me.
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Learning about assumable mortgages was honestly a complete happenstance. When I read the property's listing summary, that was one of the first things that was mentioned, which honestly seemed like a scam right off the bat.
The home was listed for $445,000, but the seller had only $259,000 left on their 30-year fixed traditional Federal Housing Administration (FHA) conventional mortgage, which had a 3% interest rate. It was a no-brainer to try to pursue that.
An assumable mortgage helped me afford homeownership
In May, I closed on the home, purchasing it for $445,000, with a down payment of around $23,000. I assumed the $259,000 mortgage and had to come up with additional funds to cover the rest of the sale price.
I'm lucky enough to have some assets with Morgan Stanley, and they extended me a line of credit with a 4.9% interest rate. That, combined with the 3% rate for the FHA loan, is a way better rate than I could ever get.
Between the home's mortgage and the Morgan Stanley loan, I spend about $2,800 each month on the house. Comparatively, to rent a three- or four-bedroom home in this area, I'd probably spend about $4,000 a month.
So it's very exciting that I could get into a home and actually have home ownership for my kids at a relatively affordable rate.
The assumption process was straightforward
I was introduced to Roam, a company that helps people find properties with assumable mortgages, through the home seller's real estate agent. Roam put me in contact with Lakeview, a mortgage company that originated my loan assumption.
Based on the other homes I've purchased, buying a home with an assumable mortgage was pretty standard. I had to provide proof of income to show that my business is legitimate and that my income is real.
I did hear from the seller that somebody else, also a small-business owner, was previously interested in buying the home. When they went through the approval process, they thought it was too aggravating or too in-depth, so they bailed out on it.
Still, I found my process to be OK. I don't think it was any more invasive than if I were getting a normal mortgage. In my case, I got all my paperwork in quickly and closed within 30 days as opposed to 90 or 120, which other people told me would be the case.
The smaller payments will improve my quality of life
What I hear from real estate agents is that home sellers have such high price points across the country, and if buyers are going to pay that much, they want something they can move into without having to pay for renovations themselves.
I think selling a home with an assumable mortgage is a win-win for both the buyer and the seller.
In my opinion, the seller benefits from being able to sell their home with a low mortgage rate, which may overshadow factors that could have otherwise deterred a potential buyer.
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For example, the sellers of my home had — I'm not going to say they let the house go — but the pool hadn't been opened in a couple of years. The liner was all messed up.
So it definitely wasn't like, "Ooh, look at our glorious oasis that you can hang out in." It was more like, "Okay, we have a pool that needs to be fixed."
I think there would have been some normally pretty hefty strike points against them had they not been able to offer the home with an assumable mortgage.
Having an assumable mortgage was also very helpful for me. As a person who owns a business and is also going through a divorce, I wouldn't have been able to afford anything else anyway. It was certainly the more viable option.
Not only did it reduce my monthly payment, but it also freed up more of my budget, which will improve my quality of life — I'll be saving thousands in the long run. I also won't have to work extra hours, and I'm not going to be house poor.
