Assumable Loans Explained Case Study 3.125% with an FHA Assumable Loan at 129 Esperanza Ave in Long Beach 2 blocks to the Ocean

Still dreaming of buying a home with the record low interest rates of the past? It’s not just a dream—it’s still possible! Try buying a home with an assumable loan.

Here is the best case study out there. Our very own listing offers an assumable FHA loan. 129 Esperanza Ave in the Alamitos Beach area of Long Beach. 3 bedrooms and 1.5 baths, the price is $1,050,000. Just 2 blocks from the beach!

Let me explain to you how an assumable loan works.

In this case the owner owes approximately $790,000 on the home.

The current loan is an FHA loan. The monthly payment is $5308.79 including Principal/Interest/Tax/Insurance (PITI) and mortgage insurance. Keep in mind that mortgage insurance is subject to change with a change in ownership. The loan was a 30 year loan and was started in August of 2021. You would have the remaining years left on the loan from that date.

If you were to purchase the home at $1,050,000 you would come up with the difference between the purchase price and existing mortgage to purchase the home, in this case about $260,000. Similar to a regular down payment. The great thing about this option is that we do have a lender that can offer a 2nd loan on the property if you don’t have the $260,000 in cash.
Now let’s compare this to purchasing this same home with a traditional loan. The listing price is $1,050,000 and at that price with $260,000 down your payment would be approximately $6800.70/month (PITI) if you had an interest rate of 7%. That is $1491.91 more per month than the assumable loan~!

I hope you can see why this is such an amazing opportunity! To get the process started, it would begin once your offer is accepted. First, the seller would need to authorize the loan servicer (in this case New American Funding) to allow you start the loan assumption process. Once it begins, it would be similar to a standard purchase with 30-45 day escrow.

Now seize the opportunity! 3.125% interest rates still exist. You just have to be creative!