New York-based affordable mortgage lending platform roaming New partnerships with national lending institutions spring equalizer The company announced Thursday that it will offer second-lien loans to Roam customers. The new service, called Roam Boost, will cater to people with a credit score of at least 640 and a down payment of at least 15%.
For example, consider a home worth $400,000 and assume the mortgage amount is $280,000. Potential buyers would still need to come up with $120,000 to close the gap. If a buyer puts down 20%, or $80,000, they still need an additional $40,000 to close the deal.
Roam Boost would benefit that hypothetical customer from an existing 3% first-lien mortgage as well as a new second-lien mortgage at current market rates, helping them achieve a blended rate of 4% to 5%, according to Roam’s calculate. This equates to significant savings compared to taking out a new first mortgage at an interest rate of 7.5%.
By finding a way to close the down payment gap, Roam Boost makes a mortgage available to 50% of potential homebuyers, according to a press release. Assumable mortgages enable a qualified buyer to take over the terms of the seller’s mortgage, including existing balance and interest rate.
Mortgage loan by federal housing administration (Federal Housing Administration) and U.S. Department of Veterans Affairs (VA) is the most common type of affordable loan. Typically, the fees are lower than those for a new loan, and no appraisal is required. An estimated 12.2 million loans, or 23% of active mortgages, are eligible for assumption. intercontinental exchange.
The number of completed assumptions is a small but growing portion of all home sales. According to the Wall Street Journal, more than 6,400 buildings will be completed in 2023, a 139% increase from 2022. Nearly 3,900 projects have been completed so far in 2024, according to a report released this week by The New York Times.
“Our mission is to triple housing affordability for 1 million Americans this decade,” Roam founder and CEO Raunaq Singh said in a statement. “As We continue to expand into new markets, and Roam Boost and our partnership with Spring EQ are a key part of bringing this mission to a wider range of potential buyers.”
Roam also expanded to three additional markets: Tucson, Arizona; Jacksonville, Florida; and Chicago. Roam currently serves 35% of U.S. households with FHA and VA loans, and the company hopes to have a nationwide presence by the end of the year, Singh said.
In addition, the company recently received $3 million in investment led by venture capital firms Founders Fund. Investors include CEO Tony Xu door panel; Dylan Field, CEO Figma; and Paul Gu, co-founder of the lending platform upstartwait.
Roam has also added new protection for its customers. If the assumption is not processed within 45 days, the company will prorate the homeowner’s mortgage until it is processed.
