Take over someone else's mortgage at their original low rate. With rates locked as low as 2.25% from 2020-2022, you could save hundreds of thousands compared to today's 6-7%+ rates.
An assumable loan allows you to take over someone else's existing mortgage—keeping their original interest rate, remaining balance, and loan terms. It's like inheriting a better deal from the past.
Seller got a VA/FHA loan in 2020-2022 at 2.5-4% when rates were at historic lows.
Apply to assume the loan. You'll need to meet credit and income requirements—but you don't need to be a veteran.
Pay the difference between home price and loan balance via cash, second mortgage, or seller financing.
The mortgage transfers to you at the original terms. You now have a 2-4% rate while everyone else pays 6-7%+.
Lock in rates from 2020-2022 when they were 2-4%. Today's buyers are paying 6-7%+.
Save $100,000-$400,000+ over the life of the loan. Lower monthly payments from day one.
You don't need to be a veteran to assume a VA loan. Meet lender requirements and you're in.
VA, FHA, and USDA loans are assumable by law. This isn't a loophole—it's a built-in feature.
Compare what you'd pay with today's rates versus assuming a low-rate mortgage from the past.
Average 30-year fixed rate as of January 2026
Many 2020-2021 VA loans have rates of 2.25-3.5%
Not all mortgages are assumable. Here are the loan types that allow assumption and what you need to know about each.
Originally for veterans, but anyone can assume
Great for first-time homebuyers
For eligible rural & suburban areas
Most conventional loans are NOT assumable. They typically include a "due on sale" clause requiring full repayment when sold. Rare exceptions exist for ARMs or pre-1980s loans. Focus on VA, FHA, and USDA loans for assumable opportunities.
The equity gap is the difference between the home's purchase price and the remaining loan balance. Here's how to cover it.
Pay the full equity gap upfront from your savings or investments.
Get a HELOC or second lien to cover part of the gap.
Negotiate with seller to carry a note for part of the equity.
Mix cash + second mortgage + seller financing creatively.
Even if you take a second mortgage at 8-9% for the equity gap, your blended rate is still much lower than getting a new 6.75% mortgage on the full amount. Run the numbers—the savings are usually substantial. For example, assuming a $380K loan at 2.75% + a $170K second at 8.5% gives you a blended rate around 4.5%—still 2%+ below market!
The assumption process takes 45-90 days. Here's what to expect at each stage.
Search for properties with assumable VA, FHA, or USDA loans. Look for listings that mention low interest rates or "assumable mortgage."
Calculate the equity gap and determine how you'll cover it. Compare total costs vs. getting a new loan at current rates.
Reach out to the seller's lender to start the assumption process. Request their assumption package and requirements.
Complete the assumption application with income verification, credit check, and all required documentation.
The lender reviews your application, verifies information, and processes the assumption. This is the longest phase.
Once approved, close on the property. The loan transfers to you at the original rate. Congratulations—you just saved thousands!
You don't need to be a veteran to assume a VA loan, but you do need to meet the lender's requirements.
Most lenders require at least 620, some may accept lower
VA guidelines recommend DTI of 41% or less
Must have sufficient income left over after expenses
One-time fee (waived for exempt veterans)
Anyone who qualifies can assume a VA loan
Lower credit requirements than VA loans
Slightly higher DTI allowed than VA
Must intend to live in the property
Mortgage Insurance Premium continues with the loan
For loans originated after Dec 1, 1986
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Don't pay 6-7%+ interest when you could be paying 2-4%. Browse assumable loan listings and start your journey to massive savings.