Real Estate

Assumable Mortgage Platform Roam Expands Coverage Area

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With $3 million in new seed funding, virtual mortgage platform Roam is expanding its coverage area to help buyers “wind the clock” and home purchases in new markets including Chicago, Jacksonville and Tucson. financing at rates not seen in years.

Technically, any seller who is still making payments on a government-backed FHA, VA or USDA mortgage can offer a qualified buyer the option to take over the balance of their loan — at whatever price they want. have gone But the buyer must compensate the seller for whatever equity they have built up in their home, so they will often need to take out a second mortgage.

Announcing it. Second round of funding Since launching last year, Roam said it has now partnered with a home equity lender. Spring EQ To offer second mortgages. Depending on the mortgage rate and the size of their other debt, Rome says it can typically provide a blended rate between 4 percent and 5 percent (see Listing on company website).

Raunq Singh

“For a lot of people, it feels like a portal to the past, right?” ROOM founder and CEO Ronak Singh told Inman. “It’s kind of like winding back the clock and buying a home … They didn’t miss the boat on being able to buy at these low rates in 2021.”

Roam, which announced a $1.25 million seed funding round led by Founders Fund partner Keith Rabois in September, has now raised a total of $4.25 million. The latest seed funding round was also led by Rabois, with participation from new investors including DoorDash CEO Tony Sue, Figma CEO Dylan Field and Upstart co-founder Paul Guo.

Roam helps home buyers find mortgage-eligible homes for assumption and manages the process on behalf of buyers, sellers and agents, charging buyers a 1 percent fee through closing costs. . With expansion into new markets, Roam says it now services 35 percent of U.S. homes with FHA and VA loans.

Demand from buyers, sellers and agents is strong, Singh said, and the company plans to offer services across the country by the end of the year.

After the company was featured in May 9 The New York Times StorySingh said he has received hundreds of emails from buyers, sellers and agents who want to know, “When are you coming to my city?”

Before partnering with Spring EQ, Singh said Roam would connect homebuyers who needed a second mortgage with several smaller preferred partner lenders, which can be an uncertain, fragmented process.

Partnering with Spring EQ provides economies of scale and a streamlined process and, because Roam doesn’t get paid to refer borrowers to Spring EQ, they get better rates.

“They take the fees they would have paid us as if we were a retail partner, and they factor that into the prices,” Singh said. “So the customer gets a significant discount and that’s how they win. We now have a national lender, they can work with you in any state you want to buy a home in, and in addition, We will give you a very competitive price as the discount is applied to customers.

The relationship with Spring EQ is not exclusive, as Roam is not paid.

“We’re just happy that we’re happy with the customers who have the lowest rates and provide the best service in the shortest time to closing,” Singh said.

In principle, any mortgage lender can help home buyers explore their options for taking out a mortgage when buying a home. On its website, New US funding touts Potential savings on FHA loan closing costs compared to conventional loans.

Loves to roam and compete. FHA Pro and subscription-based AssumeList Says they can also help buyers find homes with potential mortgages. Multiple listing services often have a “cash on loan” box that real estate agents can check to indicate an acceptable loan, and homebuyers can search Checking a box For mortgages predictable in the price pull-down menu.

Rome also has expertise in dealing with loan providers, who can be difficult to deal with when transferring a mortgage from seller to buyer, Singh said.

“We’ve done a deal with every major servicer, and we know most of the people who run the customer service department, so we can make sure customers get the best possible service,” he said. said “If there’s a problem with their file not being processed in a timely manner, we know who to escalate it to, to make sure it gets blocked.”

Roam claims its typical buyer saves $12,000 per year compared to buying a home with a traditional mortgage, and can reach the closing table in 45 to 60 days.

In December, the Department of Veterans Affairs (VA) Creditors and servicers warned Their obligation to act on assumptions in a timely manner and penalties for non-compliance are specified.

Chris Gardner, founder and CEO of FHA Pros, advises that “while high interest rates have made most loans attractive for buyer assumption, lenders and servicers are fully prepared for assumption requests. Are not.” February 29 post On the company website.

“The cynic in me tells me that this attitude and incompetence is deliberate, because these companies would rather pay off the low-rate debt than continue, which would allow them to recoup their capital so that they can Pay off your stretched balance sheet, or lend out [then-]Current 8% interest rate.

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