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Case Study: Selling a Home with a 2.75% Mortgage in Kingwood

Byeditorialteam Reading Time: 3 minutes

Use this as a template for your own listing package and buyer conversations.

Key Takeaways

  • Transparency wins: publish premium and leaseback ranges early to draw serious buyers.
  • Math sells: show payment/lifetime savings, then a PV-based premium that still leaves the buyer ahead.
  • Process matters: assumption approval and release documents must line up with possession and leaseback start.

Assumptions & Inputs (illustrative)

  • Neighborhood: Mills Branch Village, Kingwood.
  • Balance: $219,000*; Rate: 2.75%; Term left: 25 years.
  • Market benchmark: 6.5%* 30-year fixed (P&I only).
  • Premium target: $30,000*; Leaseback: 9–24 months at fixed rent*. Veterans Affairs

1. What It Is

A private, premium-priced listing where the asset is both the home and the 2.75% note. Marketing emphasizes payment stability, total interest reduction, and leaseback certainty for investors.

2. Why It Matters

In a 6–7% market, a 2.75% assumption may be the only way some buyers hit their DTI targets—or how an investor achieves DSCR > 1.2x with no vacancy.

3. The Math (Side-by-Side)

Inputs & Formulas

As in prior articles: standard amortization for P&I; compute lifetime interest; add PV of monthly delta over 7–10 years.

Example Walkthrough (illustrative)

  • Assumable: M≈$1,010∗M\approx \$1{,}010^*M≈$1,010∗; Lifetime interest ≈$84,081∗\approx \$84{,}081^*≈$84,081∗.
  • Market 6.5%*: M≈$1,384∗M\approx \$1{,}384^*M≈$1,384∗; Lifetime interest ≈$279,322∗\approx \$279{,}322^*≈$279,322∗.
  • Delta: $374*/mo; lifetime ≈ $195k* before fees/gap.
  • Premium ask: $30k*.
  • Leaseback: 12 months base with options to extend in 3-month blocks.

Sensitivity

  • If PMMS drops 100 bps, PV shrinks; consider trimming premium or enhancing leaseback terms.

4. Rules & Eligibility (Context)

  • Verify FHA/VA type; if VA, plan for 0.5% funding fee and target release of liability/entitlement substitution. If conventional, don’t market assumable unless your note truly allows it. Veterans AffairsBenefitsServicing Guide

5. Steps & Timeline (What We Did)

  1. Pre-launch: built a “Tale of Two Mortgages” sheet; set $30k* premium; announced 9–24-month leaseback window.
  2. Buyer funnel: gated VIP list; pre-screened with servicer intro.
  3. Offer & diligence: accepted investor offer contingent on assumption approval; delivered complete package quickly.
  4. Leaseback term sheet: base 12 months, two optional 3-month extensions; maintenance matrix attached.
  5. Closing: recorded transfer after approval; obtained release of liability; leaseback commenced day of funding.

6. Risks & Pitfalls

  • Servicer delays: we built in a 60-day window, extendable by mutual consent in 15-day blocks. Benefits
  • Gap financing: we encouraged cash-heavy buyers or those with competitive second terms.
  • Insurance: landlord policy for buyer; renters policy for us before possession.

7. Pricing & Negotiation

We priced using PV of monthly delta over a 10-year hold at 6%* discount rate. After fees and a small allowance for second-lien risk, $30k* premium still left the buyer with strong PV and DSCR.

8. Templates & Tools

  • “Tale of Two Mortgages” one-pager (inputs, math, PV).
  • Leaseback rider with extension/early-termination and maintenance matrix.
  • Servicer checklist and escalation contacts.

9. Real-World Examples

  • Investor accepted slightly higher rent for early-termination flexibility, keeping DSCR > 1.3x* and vacancy at 0%.

10. Next Actions

  • Replicate this package; keep numbers fresh with PMMS; publish ranges, not promises. Veterans Affairs

CTA: Join the VIP Interest List on mortgagehandoff.com for private access to assumable listings and investor-ready files.

FAQs

  1. Why a private launch first?
    To pre-screen and control disclosure; then go public if needed.
  2. What if rates drop before closing?
    Re-price premium using updated PV; consider a collar clause.
  3. How do you handle inspections during a leaseback?
    Define notice and access rules in the lease.
  4. Will every investor accept a leaseback?
    No; publish the range to attract the ones who do.

Numbers & Assumptions Disclaimer

All numbers are illustrative and based on stated assumptions and PMMS benchmarks. Actual results vary by approvals, market rates, and final contract terms.

General Information Disclaimer

Educational only; not legal, tax, or lending advice. Transactions subject to lender/servicer approval and applicable laws.

References

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