10 Most Common Questions About Assumable Mortgages
Assumable mortgages are one of the hottest topics in real estate right now. With today’s higher interest rates, buyers are looking for creative ways to save, and sellers with low-rate loans are sitting on a unique advantage.
I’ve personally closed multiple assumption deals here in Oklahoma—mainly VA loans—and I can tell you from firsthand experience that while the process has some challenges, the opportunities are huge. Below are answers to the ten questions I get asked most often about assumption loans.
1. What types of loans are assumable?
Most of the time, only government-backed loans are assumable—VA, FHA, and USDA. Conventional loans almost always have a “due-on-sale” clause that prevents assumption.
From my experience, I’ve closed VA assumptions successfully. I even had an FHA loan under contract, but the lender (Mr. Cooper) decided about a year ago that they will only allow FHA assumptions for family members already on the deed. That shows how lender-specific the rules can be.
2. Can anyone assume a VA loan—even if they’re not a veteran?
Yes! Anyone can assume a VA loan as long as they qualify with the current mortgage company. You don’t have to be a veteran. The key is lender approval—you’ll go through their application process just like you would with a new loan.
3. What does it take to qualify for an assumption?
You’ll need to apply with the current lienholder (the mortgage company that owns the loan). They’ll look at your credit, income, debt-to-income ratio, and overall ability to repay—similar to qualifying for a traditional mortgage.
4. How does the down payment work with an assumption?
The “down payment” in an assumption isn’t the traditional 3%–20%. Instead, you cover the gap between the current loan balance and the agreed-upon purchase price.
For example:
- Sales Price: $400,000
- Remaining Loan Balance: $300,000
- Buyer’s Down Payment at Closing: $100,000
If you don’t have the cash, you may need a second mortgage to cover that gap.
5. How long does the assumption process take?
Most people will tell you 60–90 days is normal. But timelines can vary based on the lender’s efficiency. Personally, I’ve closed two assumption loans with Carrington Mortgage—one in 45 days, and another in just 30 days. With the right team and lender, it can be faster than most think.
6. What do closing costs look like?
Closing costs for assumptions are typically lower than a traditional mortgage, but they depend heavily on the lender. You’ll usually have:
- Title fees
- Assumption or transfer fees (if the lender charges them)
- Standard costs tied to the closing process
Each lender’s approach is different, so it’s smart to ask upfront.
7. Where’s the real savings in an assumable mortgage?
The big win is in the interest rate. Say you can assume a 3.5% loan instead of getting a new one at today’s 6.5%—the difference in monthly payments and long-term interest is significant. Over the life of the loan, this can mean tens (or even hundreds) of thousands of dollars in savings, depending on how long you stay in the home.
8. What are the downsides or challenges?
- Cash needed: Covering the equity gap can be tough.
- Financing the gap: Sometimes buyers need a second mortgage to bridge the difference.
- Lender issues: Some mortgage companies simply aren’t prepared for assumptions or take longer than expected.
- Realtor knowledge: Not every agent has experience with assumptions, which can slow things down or cause confusion.
9. Who makes sure title and liens are clear?
Here in Oklahoma, title companies handle this. They ensure the property is free of liens and that title is clean before closing. They also take care of transferring everything properly so the new buyer is fully protected.
10. Is there really demand for assumable loans right now?
Absolutely. With interest rates still elevated, buyers are searching for homes with assumable loans. Many sellers are sitting on rates of 2.5% to 4.5%—a huge advantage that can attract motivated buyers. In fact, I’ve personally seen more buyers asking about these opportunities in the past year than ever before.
Final Thoughts
Assumable mortgages can be a win-win: buyers get access to lower interest rates, and sellers gain a unique selling advantage in a competitive market. That said, the process takes the right lender, the right title company, and the right Realtor guiding you through.
If you’re in the Oklahoma City, Choctaw, or Midwest City, Moore, Edmond, Norman, or anywhere in Oklahoma and want to know if your loan is assumable or you’re a buyer interested in finding one let’s connect. Assumptions aren’t just a buzzword; they’re one of the smartest tools in today’s market when handled correctly.
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