Today we're talking about a financial instrument that most buyers have never heard of, most agents don't know how to use, and most lenders have very little incentive to promote.

It's called an assumable mortgage — and in today's rate environment, it might be the most powerful tool sitting unused in the real estate market.

Only FHA, VA, and USDA mortgages are assumable. Conventional and jumbo loans are not assumable because they contain a due-on-sale clause, which requires full repayment of the loan when ownership of the property transfers.

So when a seller with an FHA or VA loan lists their home, a qualified buyer can step into that existing loan — keeping the original rate, the original balance, and the original amortization schedule. You don't originate a new loan at today's rates. You inherit the seller's loan from 2021 at, say, 3.25%.

Assumable mortgages are not a loophole. They are a legal, government-backed mechanism that has existed for decades and works exactly as designed. Based on analysis of 312,367 assumable listings, the average buyer saves $1,187 per month — or $14,244 per year — versus buying at today's rates.

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