Assumable Mortgages 101: The Key to Your First Home, with Michael Lorino

Assumable Mortgages 101 with Michael Lorino - Summary

Michael Lorino is the founder and CEO of AssumeList, a site where you can see Assumable Mortgages. A military veteran with over 15 years of real estate experience, Michael recognized the coming affordability crisis with rising interest rates and wondered how homebuyers could more easily find homes for sale with assumable loans. As he researched, he realized that no search tool existed, so he created AssumeList with the goal of making homes with assumable loans more accessible. Michael lives with his family in Alexandria, VA and enjoys spending time with his wife of 17 years and two young children.

Meeting Notes

Veteran's Real Estate Journey and Challenges

Michael Lorino, a recently retired military veteran and real estate agent with over 15 years of experience, shared his journey into the real estate business and his passion for helping families buy and sell homes. He explained that he and his wife divide their work roles, with Michael Lorino focusing on buyer transactions and his wife handling listings. They also discussed the challenges of managing their business and family life, especially during the busy spring market. Michael Lorino shared that their children sometimes accompany them to clients and participate in home showings, and that his mother helps with childcare when needed. Michael Lorino also highlighted the impact of rising interest rates on the mortgage industry, noting that current rates are around 6.5% to 7%, a significant increase from a few years ago.

Assumable Mortgages: Benefits and Legality

Michael Lorino and Laura discussed the concept of assumable mortgages, where a buyer can take over a seller's existing mortgage terms, including the interest rate. Michael Lorino explained this could be beneficial for buyers, as they could avoid taking out a new mortgage and save money on closing costs as they wouldn't need an appraisal or a new lender's title insurance policy. Laura highlighted that this could be especially useful for those buying homes with low, assumable mortgages. Michael Lorino confirmed that such mortgages are legal and are typically government-guaranteed. He further clarified that VA, FHA, and USDA loans are all assumable.

Assumable Mortgages: Benefits and Challenges

Michael Lorino discussed the potential benefits of assuming a mortgage on a new home, using a specific example of a military couple who were able to save significantly by assuming a loan with a lower interest rate. Michael Lorino emphasized that while this option can be beneficial, it may not be suitable for everyone. Laura expressed interest in how to find properties with assumable loans and whether she needed to be a VA veteran to qualify. Michael Lorino explained that only a small percentage of homes for sale have assumable mortgages, and they are typically government-backed loans. He also introduced a new search platform to help potential buyers find these types of properties.

Mortgage Down Payment Requirements Discussed

Michael Lorino explained the down payment requirements for mortgages, noting that it varies from property to property based on the current loan balances and the sales price. He illustrated this with an example of a $500,000 home where the existing owner's loan balance was $400,000, requiring a down payment of $100,000. However, he also highlighted that the length of time the previous owner had owned the property and the initial down payment they made could affect the feasibility of assuming the mortgage. Laura agreed, emphasizing the need to pay attention to the loan balance and sales price. Michael Lorino further explained that while some lenders offer a second m