How to Buy a Home at 2.75% in a 6.5% World: The Complete Guide to Assumable Mortgages in Greater Boston

Assumable mortgages allow you to take over a seller's existing FHA or VA loan at their original interest rate (often 2.5%-3% from 2020-2021) instead of getting a new loan at today's 6.5% rates. On a $500,000 loan, this saves $1,050/month or $378,000 over 30 years. But in Greater Boston's appreciated market, you must pay the seller cash for their equity—creating a $150,000-$300,000 'gap' between the loan balance and purchase price. Conventional loans are NOT assumable. Only government-backed FHA and VA loans qualify. Anyone can assume an FHA loan (but inherits lifetime mortgage insurance). Civilians can assume VA loans (but the seller's entitlement gets locked). Timeline: 60-120 days vs 30-45 for conventional. Best opportunities: Quincy, Worcester, Randolph, Brockton, and near Hanscom AFB (Bedford, Lexington). You need significant cash reserves, HELOC, family gifts, or creative financing to bridge the gap.

Buyers with $150,000+ in liquid cash or access to creative financing, buyers targeting high FHA/VA concentration areas (Quincy, Dorchester, near Hanscom AFB), Veterans who can substitute entitlement for VA-to-VA assumptions, financially sophisticated buyers willing to navigate 90-day closing timelines, long-term holders who want to permanently lock in low rates, and buyers using family gifts or home equity from existing properties.

• •Save $1,000-$1,500/month vs new loans: 2.75% assumed rate vs 6.5% current rate on typical Boston loan
• •The equity gap is brutal: Need $150k-$300k cash to cover difference between loan balance and purchase price
• •FHA assumptions: Anyone can assume, found in Dorchester/Everett/Lynn/Quincy, but MIP stays for life
• •VA assumptions: Civilians can assume, but seller's entitlement locks unless buyer is Veteran (substitution)
• •Timeline: 60-120 days for assumption vs 30-45 days conventional—sellers may reject just for timeline
• •Best hunting grounds: Quincy, Randolph, Brockton, Worcester, Hanscom AFB area (Bedford, Lexington, Billerica)
• •Finding properties: Use Roam.com, AssumeList, Assumable.io, or manual keyword searches on Zillow
• •Bridging the gap: HELOC on existing property, asset-based lending, seller financing, family gifts
• •Professional help needed: MA real estate attorneys (Pulgini & Norton), assumption-trained brokerages
• •Conventional loans are NOT assumable—only FHA, VA, and rare USDA loans qualify