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nthony Volpe, a semiretired pharmacist and college professor, was looking to buy a house near Orlando in the summer of 2024. He knew he had missed the window for securing a low mortgage rate during the pandemic, when rates hit their lowest point at an average of 2.7% in early 2021. By the time Volpe started his search, typical mortgage rates had more than doubled to around 6.5%, adding hundreds or thousands of dollars to monthly payments.

    Volpe found a way to secure a super-low mortgage rate through a company called Roam, which helps buyers find assumable mortgages. Assumable mortgages allow buyers to take over the seller's existing loan at its original interest rate and terms, rather than securing a new loan at the current market rate. These loans have been largely overlooked in recent decades as rates fell, but they're gaining popularity again due to the current rate spike.

    There are millions of assumable mortgages floating around the country, yet many homeowners may not realize they have one. Transferring an assumable mortgage can be a complex process, and real estate agents often lack experience with it. However, when done correctly, assumables offer a win-win for both buyers and sellers. Sellers can use their low-interest rate to attract more buyers and sell their homes for higher prices, while buyers can secure lower monthly payments.

    Volpe found a three-bedroom home in Davenport through the Roam website, where he put down 33% of the $268,000 purchase price in cash and took on the seller's 2.75% mortgage rate. He estimates saving around $500 per month compared to the typical mortgage rate. "It's giving us more breathing room," Volpe said.

    The power of a lower interest rate is significant, according to Raunaq Singh, founder and CEO of Roam. "We should just take the mortgages that already exist at an average rate of 2% or 3% and transfer them," Singh said. This would help alleviate the "lock-in effect" where homeowners are reluctant to sell their homes due to low interest rates.

    Assumable mortgages can be found through companies like Roam, which helps buyers navigate the process and connect with sellers who have these types of loans. The deal involves a buyer qualifying for the type of loan they want to take on, getting the seller's approval, and processing the assumption through the loan servicer. Buyers may need to cover the difference between the sale price and the remaining mortgage balance.

    The path to claiming an assumable mortgage isn't always smooth, with loan servicers often dragging their feet in processing assumptions. Companies like Roam help facilitate these deals by educating lenders and servicers while staying in constant contact with them to ensure paperwork flows smoothly. Despite the challenges, many people are finding that assumables offer a rare win-win for both buyers and sellers.

    Singh predicts that as the industry becomes more familiar with assumable mortgages, servicers will become easier to work with, and the process will become smoother. Even with the headaches involved, assumptions can save thousands of dollars in closing costs, making them worth it for many buyers. The biggest issue is awareness – people just don't know about this option. Singh aims to change that by educating both buyers and sellers about the benefits of assumable mortgages.

    James Rodriguez is a senior reporter on Business Insider's Discourse team, which provides perspectives on pressing issues informed by analysis, reporting, and expertise.