Assumable Mortgage
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
An assumable mortgage lets a buyer take over the seller's existing loan, inheriting its interest rate, balance, and remaining term.
What Assumable Mortgage means
FHA, VA, and USDA loans are generally assumable with lender approval; conventional loans usually are not. In a high-rate market, assuming a seller's older low-rate loan can save a buyer hundreds per month.
Florida example
If a Florida seller has a 3.25% FHA loan with $280,000 remaining, a qualified buyer can assume it instead of taking a new 6.75% loan. The catch: the buyer must cover the gap between the balance and sale price, often with a second loan or cash.
Taking over an existing loan
An assumable mortgage lets a buyer take over the seller's existing loan, including its rate and balance. When the seller's rate is far below today's rates, this can be a huge savings.
FHA, VA, and USDA loans are often assumable. Conventional loans usually are not, so the loan type matters.
What to watch for
Assuming a loan means covering the gap between the loan balance and the purchase price, often with cash or a second loan. The lender also has to approve you as the new borrower.
The process takes patience, but a low assumed rate can be worth it. Reach out and we will help you weigh whether an assumption beats a new loan.
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