An assumable mortgage lets you take over the seller’s existing loan, including its interest rate and remaining balance. FHA, VA and USDA loans are generally assumable; most conventional loans aren’t. If the seller’s rate is much lower than today’s, assuming it can cut your payment a lot, but you must pay the seller’s equity in cash or with a second loan, and the process takes longer.
How it works
- Find a home with an assumable loan; listings sometimes mention it, or ask the listing agent.
- Apply with the seller’s loan servicer, which reviews your credit and income much like a new loan.
- Pay the difference between the price and the remaining loan balance (the seller’s equity) at closing.
- Take over the payments at the existing rate and remaining term.
An example
A $450,000 home has a remaining FHA loan of $300,000 at 3%. You’d need $150,000 for the seller’s equity. If you have $50,000, you might finance the other $100,000 with a second mortgage at a higher rate. The blended payment can still be far below a new $405,000 loan at today’s rates.
The catches
- The equity gap: the bigger the seller’s equity, the more cash or second-loan financing you need.
- Time: assumptions often take 45 to 90 days or longer, and servicers vary in speed.
- VA entitlement: if you assume a VA loan without substituting your own VA eligibility, the seller’s entitlement stays tied to the loan, so sellers may prefer veteran buyers.
- Fees: FHA and VA cap assumption fees, but other closing costs still apply.
- The remaining term: you take over the time left, which can mean a shorter payoff and a higher principal share.
Is it worth it?
The larger the gap between the existing rate and today’s rates, and the smaller the equity gap, the better an assumption looks. Compare with a new loan using compare mortgage offers, and see how a second loan would work with the HELOC calculator.
Making an offer
Because assumptions take longer, offer the seller something for the wait: a strong price or flexible timing. Check your offer with the offer strength score.
Common questions
Which mortgages are assumable?
FHA, VA and USDA loans generally are; most conventional loans are not.
Do I have to qualify to assume a mortgage?
Yes. The servicer reviews your credit and income much like a new loan.
How do I pay the seller’s equity?
In cash or with a second loan, since the assumed loan covers only the remaining balance.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.