Understanding Assumable Mortgages: Benefits and Challenges in 2024

The Texas Real Estate & Finance Podcast with Mike Mills

What if there was a way to offer your clients mortgage rates below 4%? Join Mike Mills as he explores the ins and outs of assumable mortgages, along with the latest real estate trends in Texas. Enhance your expertise with these game-changing tips.

In this episode, Mike Mills delves into the world of understanding assumable mortgages, focusing on the benefits and challenges these loans present. He offers a detailed update on mortgage rates, including the potential for rates to drop below 7%, and discusses the implications for the Texas real estate market. Key topics include FHA and VA assumable loans, current housing inventory trends, and the impact of insurance premiums. Stay informed with the latest insights and advice tailored for Texas realtors. This episode is packed with essential information to help you navigate the complexities of the current market.

Key Takeaways

The Benefits of Assumable Mortgages

Assumable mortgages, particularly FHA and VA loans, offer potential buyers the chance to take over a loan with a lower interest rate. This can be a significant advantage in a high-rate environment, making homes more affordable for buyers and potentially easier to sell for homeowners.

The Challenges of Assumable Mortgages

While assumable mortgages can be beneficial, they come with challenges. Sellers must find buyers who can cover the difference between the loan balance and the home's sale price, often requiring a substantial cash payment. Additionally, the approval process can be cumbersome and time-consuming.

Current Mortgage Rate Trends

Mike Mills discusses the latest mortgage rates, noting that while there's hope for rates to dip below 7%, the market remains volatile. Understanding these trends is crucial for realtors advising clients on the best times to buy or refinance.

Housing Inventory and Market Dynamics

The episode highlights the ongoing changes in housing inventory, with improvements from historic lows but still not reaching levels that would significantly ease affordability issues. Realtors must stay informed about these dynamics to better serve their clients.

Impact of Rising Insurance Premiums

Mike touches on the rising costs of home insurance, particularly in Texas, where premiums have surged nearly 60% in recent years. This trend adds another layer of complexity for buyers and homeowners, impacting overall housing affordability.

Time Stamped Summary

0:08 - 0:44: Introduction and Market Update

Mike Mills welcomes listeners and provides a quick market update for the week of July 9th, touching on the recent 4th of July celebrations and transitioning back into the business mindset.

0:45 - 2:23: Real Estate Market Overview

Mike discusses the current state of the real estate market as summer buying season heats up, emphasizing the importance of staying informed and motivated.

2:24 - 4:34: Mortgage Rates Update

Mike details the current mortgage rates, including conventional, FHA, VA, 15-year, and jumbo loans. He explains the potential for rates to dip below 7% and the factors influencing these trends.

4:35 - 6:03: Refinancing Trends and Homeowner Decisions

Mike explores the increase in refinancing applications, noting that many homeowners are opting for cash-out loans to pay off debt or improve their homes rather than moving.

6:04 - 8:02: National Housing Inventory Trends

Mike provides an update on national housing inventory levels, highlighting improvements from historic lows but noting that inventory is still below market averages.

8:03 - 10:24: Texas Real Estate Market Insights

Focusing on North Texas, Mike discusses local trends, including median home prices, new listings, days on market, and months of supply. He explains how these trends impact buying and selling decisions.

10:25 - 12:12: Real Estate Portal Wars

Mike covers the ongoing legal battles between major real estate portals, including Realtor.com, Homes.com, and Zillow, discussing the implications for realtors and the industry.

12:13 - 13:30: Housing Affordability Issues

Mike highlights the increasing cost of housing and the strain on buyers, comparing current affordability challenges to those during the 2008 financial crisis.

13:31 - 15:00: Rising Insurance Premiums

Mike discusses the significant rise in home insurance premiums, particularly in Texas, and the potential impact of the 2024 hurricane season on these costs.

15:01 - 25:07: Understanding Assumable Mortgages

Mike dives into the main topic of the episode, explaining what assumable mortgages are, the benefits and challenges they present, and why they are often underutilized. He provides detailed insights into FHA and VA assumable loans and the factors that influence their viability.

25:08 - 25:53: Conclusion and Call to Action

Mike wraps up the episode, encouraging listeners to share the podcast, leave reviews, and reach out for more information. He emphasizes the importance of staying informed and working together to navigate the real estate market.

Resources

Geneva Financial Website: https://www.millsteammortgage.com

NMLS Consumer Access: https://www.nmlsconsumeraccess.com

Realtor.com: https://www.realtor.com

Homes.com: https://www.homes.com

Mortgage News Daily: https://www.mortgagenewsdaily.com

Mike Mills LinkedIn: https://www.linkedin.com/in/mike-mills-49a09621/

Mike Mills Facebook: https://www.facebook.com/mike.mills.3110

Mike Mills Instagram: https://www.instagram.com/mikemillsmortgage/

Mike Mills Twitter: https://twitter.com/mikemillsMTG

Mike Mills TikTok: https://www.tiktok.com/@mikemillsmortgage

Mike Mills Mortgage

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YouTube: The Texas Real Estate & Finance Podcast - Buying or Refinancing a home? Looking to invest in Real Estate? Looking to gain more basic financial knowledge? Tune in weekly as we discuss all things Real Estate and Finance. And the occasional surpise guest not related to any of that, about other topics I find facinating. I hope you will too! Hope you enjoy!