The real estate market is constantly evolving. As interest rates rise, home prices fall, and economic uncertainty looms, buyers and sellers alike are searching for creative solutions to navigate the unpredictable waters of homeownership. One New York-based startup aims to chart a new course, providing a unique option for financing homes with assumable mortgages. Let’s explore how Roam is reimagining the home-buying process.

Navigating the Changing Tides

Over the past several years, low interest rates fueled a red-hot housing market. Buyers rushed to purchase homes before rates climbed higher. Bidding wars were common and homes routinely sold above asking price. But the tide has turned. As the Federal Reserve raises rates to curb inflation, mortgage rates have surged. The 30-year fixed rate topped 7% in October 2022 for the first time since 2002. This rapid rate increase has significantly eroded buyer purchasing power. And homes are sitting on the market longer before selling.

For buyers and sellers alike, uncertainty abounds. Sellers face shrinking demand as rising rates sideline buyers. And buyers see their budgets stretched as mortgage payments soar. Creative solutions are needed to navigate the changing real estate currents.

An Innovative Approach

This is where Roam aims to chart a new course. Founded in 2022 and led by CEO Raunaq Singh, Roam connects home buyers and sellers through an online marketplace of properties with assumable mortgages.

Assumable mortgages allow buyers to take over the existing home loan from the seller. This provides buyers access to lower interest rates, reducing monthly payments by up to 50% compared to current market rates. And it offers sellers a way to market their homes as more affordable.

As Singh told Yahoo Finance, approximately 30-33% of mortgages issued in 2020 and 2021 were government-backed loans, which are eligible for assumption. So there’s significant potential inventory for Roam to tap into.

Smoothing the Transition

The path from listing to closing is complicated enough without navigating the assumption process. Roam aims to simplify the journey for both buyers and sellers.

For buyers, Roam provides an online searchable database of properties with assumable loans. Users can filter by location, price, and interest rate to identify options matching their homebuying criteria.

Once a buyer finds a property they wish to pursue, Roam manages the assumption process from offer to close. They work with lenders to qualify buyers for assumption eligibility and handle all the required paperwork. This helps smooth the transition and prevent sales from derailing due to assumption complexities.

For sellers, Roam amplifies the marketability of their home by advertising it across their platform as an affordable option for buyers. Roam guides sellers through the required steps to qualify their mortgage for assumption. And they market the home to qualified buyers seeking lower-rate loans.

Charting the Course Ahead

Roam closed a $1.25 million seed funding round in September 2022 to propel its next phase of growth. The round was led by Founders Fund, with participation from Opendoor co-founder Eric Wu.

The company plans to expand into new markets across the U.S. in the coming months. Roam is currently available in five states and will ramp up outreach to connect more buyers and sellers nationwide.

Roam is leaning into education and awareness as well. Many buyers and sellers remain unaware of assumable mortgages as an option. Roam wants to spread the word so more people can navigate the turbulent real estate waters.

The winds of change are blowing through real estate. As the market shifts, new solutions are needed. Roam is charting an innovative path forward, unlocking opportunities for buyers and sellers alike. It will be fascinating to watch Roam’s voyages in the years ahead as they pioneer new ways to cruise the real estate seas.

The Takeaway

• Rising mortgage rates have significantly reduced buyer purchasing power. Creative financing solutions are needed.
• Roam connects buyers and sellers through an online marketplace of properties with assumable mortgages.
• Assumable mortgages allow buyers to take over the seller’s existing lower-interest-rate loan.
• Roam manages the assumption process from listing to closing, streamlining the journey.
• Roam provides an innovative solution to navigate the turbulent real estate market.

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