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What’s the deal with assumable mortgages? Why don’t realtors like them?

My realtor said they are tricky to navigate, the seller has to be on board with it, it involves more work and is more invasive to the seller, and the seller’s agent may never have heard of them which means the buyer’s agent has to explain it. She then proceeded to explain why buy-downs were a good choice and how I can refinance later.

For me, buying now planning to refi later is timing the market which I am not interested in doing (things are way too volatile and my only prediction is volatility will continue). Also, buy-downs and refinancing both involving paying considerably more money. Now, assumable mortgages have extra costs too, particularly the 1% extra I offered my realtor for the extra work she’d have to do. For me, it’s entirely worth it to have a home at half the mortgage payment, even with PMI I wouldn’t otherwise have. (I’m a good candidate for assumable mortgage because I can afford a large down payment.)

Honestly, I’m trying to find a good solution for myself in this shitty market but also trying to help my realtor sell me a house. What is currently holding me back is: I’m single, and I’m afraid of losing my job and having a large mortgage payment to worry about. Yes I have emergency savings, but I’m still afraid. I’ve never experienced job market stability so in my mind, my salary is exactly as likely to increase as it is to go to $0. I’m very financially risk-averse. Another thing holding me back is the market volatility: I’m afraid of buying a home with 20% down and then 5 years in I still have only like 22% equity and my home has dropped 5% in value because I overpaid for it, so now I actually have less equity than I started with. Numbers are made-up, but this is the kind of thing I’m scared of. If I settled for a home with an assumable mortgage (which I would most definitely be settling in some way…most of the times when that’s advertised it’s because the home is not selling, and 99% of them are townhomes and condos whereas I want a detached home), at least I’d be in a strong financial position to move in 5-6 yrs if I want to. I feel like it would give me more peace of mind too. I’m 40; I don’t have plans to marry or move but anything can happen and I don’t want to be trapped in my home. Plus, with half the mortgage payment I can double up and pay off the mortgage that much sooner - that would be great because, again, I’m already 40 and never owned my own home. At the same time, if I lose my job my savings will last twice as long and I can still afford the mortgage if I find a job at half my current salary. It really eases my anxiety and I’m very close to letting my realtor contract expire and doing this on my own if she pushes me to conventional loans with buy-downs.

So help me understand: what is so bad about assumable mortgages??? Am I under-appreciating the savings my realtor mentions? Is it really better to go conventional? (If I found my dream home at a good price, I wouldn’t hesitate…but those homes basically don’t exist; I saw 2 and they stayed on the market for 2 days and one of them was $50k over my budget so ultimately I just wasn’t comfortable with it.)

submitted by /u/anonymous_googol
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source https://www.reddit.com/r/RealEstate/comments/17idrpd/whats_the_deal_with_assumable_mortgages_why_dont/
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