I bought two homes with interest rates below 3.5%. It's hard work to get this kind of mortgage, but it was worth it.

• Lori Coryell and her husband purchased two homes in Oregon with interest rates below 3.5%.
• The homes came with assumable mortgages, which allow buyers to take over a seller's existing rate.
• Getting a low rate when rates are high is great, but buyers have to be proactive, Coryell said.

This as-told-to essay is based on a conversation with Lori Coryell, 62, a retired US Air Force veteran who bought two homes in Oregon with assumable mortgages. (She's selling one of them, also with an assumable mortgage.) 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've lived in Oregon for most of my life. In 2020, my husband and I bought a home in Beaverton for $650,000 with a 2.5% mortgage interest rate.

I'm a USAF veteran, and the home's previous owners let us know that the home had an assumable Veterans Affairs (VA) mortgage. My husband and I took an interest in this, believing it could be a valuable asset.

That's because assumable mortgages are a big deal. For the buyer, it can make or break how much house they can afford. And for a seller, it allows them to list the home at a slightly higher price as potential buyers are likely to obtain a lower interest rate.

My husband and I knew that interest rates weren't going to stay low forever. So, if we decided to sell the home in the future, the lower rate, which could transfer to the next buyer, would benefit us as the sellers — it made the whole deal very attractive.

We purchased another home with an assumable mortgage when rates were higher

We bought another home with an assumable mortgage in 2023.

My daughter, who was not expected to have a baby, ended up getting pregnant. My husband and I were very excited. It was her first child and my first grandchild, and I knew she was going to need some help with the baby.

Our Beaverton house was an hour and a half away from where she lived. We thought that moving to Gresham, which is 15 minutes away, would make a huge difference.

In Gresham, there weren't many homes for sale. That's because inventory is sparse throughout the Portland metro area. I don't think it's made the real-estate market as competitive as it was two years ago, but home prices are still pretty high.

Although there were a couple of neighborhoods that we were particularly interested in, none of the homes there met our needs. Most of the properties needed some sort of remodeling or major updating.

We looked for four to six months, and started getting discouraged. But in December, I stumbled upon a house we really liked in the area.

The home was built in the 1990s and is 2,800 square feet, with four bedrooms and 2½ baths. It was on the market for $620,000, which was on the higher end, but it had what we wanted in a home, like a master bedroom on the main floor.

When I read the home's description, it mentioned an assumable mortgage, which made the home even more attractive to us. We bought it for $615,000 and ended up paying the difference between the sales price and what they still owed on the house, which was $260,000.

We also paid them a $10,000 premium so that we could retain their VA entitlement, because mine was already being used on the house in Beaverton.

Basically, as a veteran, if you allow somebody to assume your loan, your VA entitlement goes with that loan. This means you can no longer buy another house with a VA entitlement.

Our decision to buy the house ultimately came down to two reasons: First, the interest rate was at 3.5%, a drop from the going rate of at least 7.5% back in December. Second, when we assumed the mortgage, there were only 23 years left in its term, making it a shorter duration compared to the entire mortgage term of 30 years.

For our Gresham home, the principal and interest is based on $359,000; at 7.5%, the payment is $2,510. With the assumption of the loan at 3.5%, the payment is $1,612. Compared to the latter, the savings is $898 a month.  

Or look at it this way:  Over the life of our loan, since we assumed it, it is only 23 years or 276 payments. The monthly savings of $898 times the remaining payments, is a lifetime savings of roughly $247,848.

Getting an assumable mortgage isn't easy

Assumable mortgages can be super hard to find.

As a buyer taking over an assumable loan, the biggest issue is making sure that the sellers understand they have to initiate the process with the bank.

It goes like this: The homeowner goes to their bank and tells them they are selling their house and that they want to use the assumable option on their existing loan. At that point, the bank sends the new buyers paperwork so they can pre-qualify for that loan.

Banks don't do a whole lot of assumable loans, because they don't have an incentive to like with traditional loans. They'd rather give you a 7% interest rate than a 2%.

My biggest word of advice is to be patient, because it takes the banks a long time to get the paperwork started. And the second piece of advice is be responsive.

When originating our assumable loans, we were pretty aggressive with the bank. Whenever they reached out for information, we would follow up with them that same day. You have to remain involved, engaged, and active in the process.

We're selling a home with an assumable loan — and it's tricky

After living in the home for three years, we listed it for sale in 2023. It's currently on the market for $889,000 with the 2.5% percent mortgage rate. There's about $611,000 left on the assumable mortgage.

The principal and interest on $611,000 at 2.5% is $2,414 a month. That same P&I at today's interest rate of 7.5% would be $4,272. That is a savings on interest of $1,858 every month for the life of the loan.

So far, the home has seen a lot of interest from buyers. When it first went on the market, we had 50 people come through and tour the home. We've received a few offers, and currently have a buyer going through the assumption process right now.

Owning two homes has been very stressful on our budget since I am retired on a fixed income. Any savings we have will be put back into our retirement fund once the Beaverton house closes.

The process of getting an assumable mortgage is not easy, and I would not recommend it if you are not willing to put in a little extra effort.

I feel the process is worth the effort on the buyer's side, but I'm questioning the value on the seller's side.

Our house has been on the market since December. We are working with our third set of buyers. The process just takes a long time. Hopefully, this time will be the right one.