What Is a Mortgage Assumption?

A mortgage assumption allows a buyer to take over your existing mortgage—including its interest rate, remaining balance, and terms—with the lender’s approval. Instead of applying for a new loan, the buyer assumes your current one, and you are released from further liability on the debt once the process is complete.

Why Would a Buyer Want to Assume Your Loan?

• Lower Interest Rate: Many mortgages originated in recent years have rates well below current market rates.

• Lower Monthly Payments: Buyers can benefit from smaller payments based on your existing rate and balance.

• Faster Closing Times: Fewer steps than a traditional loan application process in some cases.

What’s In It for You as the Seller?

• You’re Released From the Loan: Once approved, the mortgage is no longer your responsibility.

• Avoid Prepayment Penalties: Some sellers avoid prepayment penalties by allowing an assumption.

• Attract More Buyers: Assumable low-interest loans can increase demand for your property.

Which Loans Are Assumable?

Loan TypeIs It Assumable? ConditionsFHAYesBuyer must qualify with lender.VAYesBuyer must qualify; non-veterans may assume but veteran eligibility may be tied upunless assumption is to another veteran.USDAYesBuyer must qualify with lender.ConventionalRarely (Not Assumable)Most Fannie/Freddie-backed loans are not assumable.

Note: Not all lenders follow the same process. We help confirm the loan type and contact the servicer to verify assumability.

How the Process Works:

1. Loan Review & Confirmation
   We verify whether your loan is assumable and confirm requirements with your lender or loan servicer.

2. Purchase Agreement Signed
   You and the buyer agree on terms and sign a purchase agreement, subject to lender approval.

3. Buyer Submits Assumption Application
   The buyer applies with your current lender. The lender will review income, credit, and debt-to-income ratio.

4. Lender Review (30–90 Days)
   The lender processes the application. If approved, they issue a formal assumption package.

5. Closing
   The buyer signs to take over your loan, and you are fully released from mortgage responsibility. Any equity is paid to you at closing (if applicable).

Frequently Asked Questions

Will I still be liable for the loan after the assumption?

No. Once the assumption is approved and completed, you are legally released from the mortgage obligation.

Can I sell my home for more than what I owe?

Yes. If your home has equity, the buyer can either pay the difference in cash or take a second loan. The assumable mortgage only covers the existing balance.

Does this affect my credit?

Once the assumption is complete, your mortgage will show as paid/transferred. If payments are made during the process, that can help your credit.

What if my loan is not assumable?

In that case, we can explore other strategies—like traditional sale, refinance before sale, or seller financing options.

Important Notes for Sellers and Agents

• Assumption Requires Lender Approval: It’s not automatic. The buyer must submit an application and qualify under the lender’s standards.

• Time Frame: The process may take 30–90 days, depending on the lender.

• Not Legal in All Situations Without a License: In some states (e.g., Illinois, South Carolina, Oklahoma), facilitating assumptions for a fee may require a licensed real estate professional. We ensure compliance or partner with licensed professionals as needed.

Why Work With Us?

We specialize in helping sellers exit their mortgages cleanly and legally by matching them with qualified buyers who value low-interest loans. We:

• Handle the assumption paperwork

• Work with your lender

• Coordinate with your agent or attorney

• Keep you informed at every step