Worthless Decoy

Aura misallocated optimally

[Makayla | Real Estate Investor @REIMakayla]

Someone is selling a house right now with a $250,000 mortgage at 2.99% attached to it, and you are allowed to take over their payments

Not refinance it. Not match it. Take it. Same rate, same balance, same 26 years left on the clock. Today's rate is 6.89%, the highest in a year. The difference on that one loan is $592 a month

It's called a mortgage assumption and the bank has to let you do it if you qualify. Here's how it works:

Every FHA and VA loan in America was written so it can be transferred to the next buyer. That's millions of mortgages. As of this spring, 40% of the money sitting in government-backed home loans still carries a rate under 4%. Those houses are on the market like any other house. The rate travels with the deed if you know to ask for it

You don't have to be a veteran to take over a VA loan. You don't have to have had an FHA loan before. You qualify the way the seller qualified: credit, income, debt. The loan's servicer processes it. The seller is released. The rate never moves

The math on that $250,000 balance:

At 2.99%, the payment is about $1,053
A new loan for the same $250,000 at 6.89%: about $1,645
Difference: $592 a month
Over the 26 years left: about $184,000

Now the part that stops most people, so it doesn't stop you:

The seller owes $250,000. The house is worth $400,000. The $150,000 gap is your down payment. Cash, a second loan, or a mix. Even if you borrowed the entire gap at 9%, your combined payment lands around $2,260. A brand-new loan on that same house with 3.5% down is about $2,540. Every dollar of the gap you cover with cash instead of a second loan drops it further

"Why isn't everyone doing this?"

Because nobody can find them. There is no Zillow filter for "seller has a 2.99% FHA loan." A startup called Roam built exactly that marketplace in 2023. It shut the service down last month. Your realtor has probably never closed one. The servicer makes almost nothing on it compared to writing a new loan, so nobody in the transaction is motivated to bring it up

So you bring it up:

1. Search listing remarks for the word "assumable." Some agents know to list it
2. For every house you like, ask one question: "What kind of loan does the seller have and when did they get it?" An FHA or VA loan from 2020 or 2021 is the jackpot
3. Mortgages are public record. Your county recorder's website shows the loan type and date on any address. Pull it before you offer
4. Write the assumption into the offer. Plan on 2 to 3 months instead of 30 days. The agencies cap the fees and there's usually no appraisal

The catches, in full. FHA loans written after 2013 carry mortgage insurance for the life of the loan, so run the payment with it included. If you take a VA loan from a veteran, part of their VA benefit stays tied up in your house until it's paid off, so some veterans want extra money for it. And a few sellers know exactly what that rate is worth and price it in. Most don't

A stranger locked in a rate three years ago that you will not see again in your lifetime. The law says you can have it. You just have to ask before the house sells to someone who didn't

I will teach you how to flip houses. Link in my bio, fill out the form and I'll hit you back

[Worthless Decoy @WorthlessDecoy]

@raritycapital @priming_xyz @ParallelTCG T-shirt size S-M ser
Expect it next sprint :)