This article originally appeared on Business Insider.
This as-told-to essay is based on a conversation with Amy Yzaguirre, 40, a student and barista, who with her husband purchased a home with an assumable mortgage in Tigard, Oregon, in March 2023. An assumable mortgage allows qualifying buyers to acquire the interest rate, current principal balance, and other conditions of a seller’s existing loan. Not all loans can be assumed. The essay has been edited for length and clarity.
I grew up in the Portland area, but moved to Boise in 2017. In 2022, my husband and I decided to move back to Oregon.
My husband had applied for some jobs in Portland and got a position, but we had just refinanced our Boise home. Since we had signed a no-flip clause, we couldn’t sell it until April 2022.
We planned that he would move to Portland and live with a friend while our son and I stayed back and got the house ready to be sold in April. Then, we would join him and buy a house.
But in January 2022, I was diagnosed with stage four non-Hodgkin’s lymphoma. I didn’t want to undergo half of my chemo treatment in Boise and the other half in Portland, so we had to figure out a way to be together as a family while I underwent chemotherapy.
Yzaguirre and her husband in front of their RV. Courtesy of Amy Yzaguirre via BI
We had to keep the house until April, but we couldn’t afford to pay two mortgages or pay rent and a mortgage. A family friend gave us the idea to buy an RV and live on my parents’ land in Oregon. We lived there for eight months. It was pretty rough, but we made it work.
In March of 2022, we started looking at houses through our realtor. I was in the middle of chemo, but on the days that I would feel good, we would meet up with brokers.
One suggested, “To get the type of mortgage loan that you want, you need to wait until you’re back to work.” So, we decided to pause our home search until then. While waiting, we got our credit in a good spot. When August came around and I got a job, we started seriously looking at houses.
Finding an affordable home to buy was difficult
We wanted to live in the suburb that my parents lived in, called Tigard, but the area was too expensive for us and the real estate market was fairly competitive.
It’s funny how an area can be a nice, family-friendly, affordable place to live, and then all of a sudden it becomes overpopulated and it’s not nearly as reasonable as it used to be.
We eventually decided to look in the Sherwood area instead. At this point, I had beaten cancer and was in remission. My husband and I were excited that we could take the next step and buy a new house.
We qualified for a substantial loan through our mortgage company, but we didn’t want our monthly payments to be too high. We set our budget for a home at no more than $450,000 — but even that was a bit of a stretch.
Amy Yzaguirre’s Oregon home. Courtesy of Amy Yzaguirre via BI
As we looked, we really couldn’t find many homes that checked all the boxes for that amount.
But in September 2022, we found a townhouse that was on the market for $416,000. On a flier for the home, its seller had written that if we wanted to assume her loan, she was locked in at 2.5%.
That didn’t necessarily draw us in because we didn’t quite know what that meant.
I was more interested in the fact that it was a 1,500-square-foot townhouse that had everything we wanted, like a backyard, a big garage, and an open floor plan with hardwood floors.
At the time, I believe mortgage rates were close to 6%. If we had a traditional mortgage, our monthly payment would have been about $3,000 a month. I remember being like “Okay, that’s pretty high, but I think we can make it work. We’re just going to have to be really careful.”
An assumable mortgage was too irresistible to pass up
We told our realtor about the home and asked her what an assumable mortgage was. She said “You’ll have to talk to our mortgage broker. I don’t really have any experience with that and don’t know what it entails.”
I asked the mortgage broker, and he admitted, “Well, we haven’t dealt with this in probably about 30 years, so I’m not entirely familiar with the process. But essentially, when you assume a loan, you’re taking over the seller’s mortgage. If you qualify, you can adopt their locked-in rate, and you don’t have to pay current mortgage rates.”
He warned us that the seller’s mortgage company was not going to hold our hand through the process. But if we were willing to put in a rigorous amount of work and do a lot of bugging, we should definitely try it because it would save us a lot of money.
I did the math. The seller was locked in at 2.5%, so if we qualified to assume the loan, our mortgage would be a little over $2,100 a month versus the over $3,000 we would be paying with a traditional mortgage at current market rates. It would save us over $40,000 in the long run. That would give us wiggle room and allow us to continue our lifestyle instead of having to scale back.
It sounded amazing, so my husband and I decided to pursue the loan assumption.
It’s not easy assuming a loan — and it took forever
In March 2023, we purchased our home for $418,900 and made a downpayment of $48,000. The home had a 30-year fixed-rate mortgage, with 28 years left on a $383,000 Federal Housing Administration (FHA) loan.
We worked with Flagstar to assume the mortgage and they assigned us an advocate. He was really nice and helped us through the process.
In the end, we ended up submitting over 200 documents, and the process took three full months.
At a certain point, my husband was over it and just wanted to go with a normal mortgage. I had to assure him I could take care of it and that it would all be worth it — we just had to be patient.
Yzaguirre’s husband and son. Courtesy of Amy Yzaguirre via BI
The mortgage broker we originally spoke to was right — as the company processing the assumable mortgage isn’t making any money, you really have to advocate for yourself, jump in there, and ask questions.
I tell anybody who has asked me about assuming loans that it’s going to take a long time, and it will be grueling. The process will humble you in some ways too because you start doubting yourself, like, “Am I a horrible financial person? Why did they need so much information? Am I not doing this right? Is there something that I’ve done wrong?”
But once you get through the process, you should be able to get it.
It just takes time.
The hard work getting the assumable mortgage was worth it
After living in a tiny 21-foot RV, buying a home gave us freedom and a new beginning. It also helped me not feel boxed in anymore.
Amy Yzaguirre and her husband. Courtesy of Amy Yzaguirre via BI
Even though I was fortunate to have good insurance during chemotherapy — once I hit a certain deductible, insurance covered the rest — and have excellent insurance through my current job, I still had quite a few medical bills to pay off.