Is Your Home an Assumable Mortgage Property?

You may wonder if your home is an assumable mortgage property or not. This is especially important if you want to market your home as a low-rate mortgage property or make it more appealing to buyers. The good news is, figuring this out is quite simple once you know what to look for! Let’s go over the basics of assumable mortgages.

What Are Assumable Mortgages?

An assumable mortgage allows a homebuyer to take over the seller’s existing mortgage, typically with its current interest rate and terms. This feature can make your property much more attractive in a high-rate market.

Types of Assumable Loans

FHA Loans

• Administered by the Federal Housing Administration.
• FHA loans have permitted assumptions since 1986.
• Generally assumable if the FHA is backing your mortgage.
• The buyer must qualify with the lender.

VA Loans

• Backed by the US Department of Veteran Affairs.
• Typically assumable, regardless of whether the buyer is a veteran.
• The buyer must meet the lender's requirements.
• Seller’s VA entitlement remains tied to the property until the loan is paid off or refinanced, unless the buyer is also a qualified veteran with entitlement.

USDA Loans

• Provided by the US Department of Agriculture.
• As government-backed loans, they are generally assumable.
• The buyer must meet the lender’s qualification requirements.

Conventional Loans

• Most conventional (non-government-backed) loans contain a “due-on-sale” clause, which prevents loan assumption.
• Only in rare cases will a conventional loan become assumable, and this usually requires explicit lender approval.

How to Verify If Your Loan Is Assumable

1. Review your loan documents.
   • Identify your loan type to determine its assumability.
2. Search for "assumption" clauses.
   • Look for language about loan assumption (assumability clauses), “due-on-sale” clauses, and transfer provisions.
3. Contact your mortgage servicer.
   • If you’re unsure, call the company that collects your loan payments. They can confirm your loan type and whether it’s assumable.

Get Expert Help If You’re Unsure

If you’re still uncertain, consider consulting experts like Assumable. They can review your documents and guide you through the mortgage assumption process.

• Professional assistance can quickly clarify your options.
• Note: Even if your mortgage is assumable, the buyer must still qualify with your lender based on credit and income.
• Not all government-backed loans originated before certain dates may be freely assumable; lender approval is almost always required for loans issued after the late 1980s.

Learn More About Mortgage Assumption

For more in-depth information and tools, visit app.assumable.io and explore your options on assumable mortgages today!