Q: What is an assumable mortgage and how does it work? A: An assumable mortgage lets a qualified buyer take over a seller’s existing loan, including the interest rate, remaining term, and monthly payment, which can cut monthly costs when the seller has a low-rate loan. Assumable mortgages FHA VA loans are generally available with FHA and VA loans and require servicer approval and buyer qualification. Q: Who benefits most from assumable mortgages? A: Buyers who can cover the equity gap with cash, down payment assistance, or a second loan benefit most, along with sellers who want more offers and a faster sale. Communities also gain mobility when assumptions make homes affordable while market rates remain higher than pandemic-era lows. Q: What are the main differences between FHA and VA assumptions? A: For assumable mortgages FHA VA loans, both require buyer qualification and servicer sign-off, but VA assumptions often include a 0.5% funding fee while FHA assumptions may have capped processing charges and retain the original mortgage insurance rules. Sellers on VA loans should secure a release of liability and, if possible, a substitution of entitlement because a non-veteran assumption can leave the seller’s VA benefit tied up. Q: How does the loan assumption process typically work from start to finish? A: Begin by confirming the loan is assumable and requesting the unpaid balance, interest rate, remaining term, and escrow amounts, then apply with the servicer and submit standard documents since the buyer must qualify on credit, income, and debt-to-income ratio. Processing often takes 30–60 days, and at closing title and escrow handle payoffs while the servicer issues a release of liability after approval. Q: How can a buyer cover the seller’s equity when taking over a loan? A: The buyer must pay the difference between the purchase price and the loan balance using cash, down payment assistance from builders, lenders, or state programs, or a second mortgage or HELOC to create a blended payment. Buyers should keep any second lien small and consider a shorter term to reduce blended-rate risk. Q: When is assuming a loan a better option than using a buydown? A: Assumable mortgages FHA VA loans keep the seller’s low rate for the life of the loan, so an assumption typically beats a buydown when the seller’s low-rate balance is large and the original rate is much lower than current market rates. Do a simple math check by comparing the seller’s payment on the existing balance plus any second-loan payment to the payment on a new loan with a temporary buydown. Q: What are common hurdles or legal risks with assumptions and how should buyers handle them? A: Common hurdles include servicer delays, appraisal and title requirements, and second-lien risk, while “subject to” deals that skip servicer approval can trigger due-on-sale clauses and legal exposure. Mitigate these risks by asking servicers early about timelines and required documents, sticking to approved assumptions, and obtaining proper seller releases of liability. Q: How do I find assumable listings and what costs and timeline should I expect? A: Scan listing remarks for terms like “assumable FHA/VA,” “low rate,” or “seller’s VA loan,” ask listing agents for the current balance and rate, and work with lenders and processors experienced in assumptions. Most assumptions close in 30–60 days and involve title, escrow, and recording costs plus servicer processing fees and, for VA loans, a funding fee, with paperwork such as the purchase agreement, assumption package, income documents, HOA statements, and any second-lien disclosures.