How to Assume a Mortgage 2026: VA/FHA Complete Guide (Save $100K+)
SECRET: Take over someone's 2.75%-3.5% mortgage instead of getting 6.75% new loan! Mortgage assumption = you take over seller's existing loan with their LOW rate. Save $100K-$200K in interest over 30 years! Eligible loans: VA, FHA, USDA (most conventional NOT assumable). Process: 45-90 days, qualify with lender, pay equity gap ($100K-$300K cash). Where to find: Zillow "assumable" filter, VA/FHA listings, realtor. Get pre-qualified for assumption. Related: VA loan guide.
💰 Assumption Savings Example:
$400K Home: Assume 2.75% mortgage vs 6.75% new loan
Monthly Savings: $735/month ($1,680 vs $2,415)
30-Year Savings: $264,600 in interest saved!
Catch: Need $100K-$300K cash for equity gap
Timeline: 45-90 days (slower than regular purchase)
⏰ Find assumable mortgages NOW! Rates won't stay low forever!
What is Mortgage Assumption? (Simple Explanation)
📚 Mortgage Assumption Explained:
Mortgage assumption = you take over the seller's existing mortgage with their original interest rate, remaining balance, and loan terms. Instead of getting a NEW loan at 6.75%, you ASSUME their OLD loan at 2.75%-3.5%.
Example: $400K Home Purchase
Seller's Mortgage: $300K balance, 2.75% rate, 25 years left
Home Price: $400K
Equity Gap: $100K ($400K price - $300K mortgage)
You Pay: $100K cash + assume $300K mortgage at 2.75%
Result: You get 2.75% rate instead of 6.75%! Save $735/month!
🎯 Ready to Assume a Mortgage?
Get pre-qualified for VA/FHA assumption! Compare rates FREE!
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Which Mortgages Are Assumable? (2026 Guide)
| Loan Type | Assumable? | Requirements | Timeline |
|---|---|---|---|
| VA Loan | ✅ YES | Qualify with lender, any buyer | 45-90 days |
| FHA Loan | ✅ YES | Qualify with lender, any buyer | 45-90 days |
| USDA Loan | ✅ YES | Qualify + income limits | 60-120 days |
| Conventional | ❌ NO | Due-on-sale clause | N/A |
| Jumbo | ❌ NO | Due-on-sale clause | N/A |
💡 Key Insight:
VA loans are the BEST for assumption because: (1) No down payment required originally = lower balance, (2) Veteran can get entitlement back after assumption, (3) Non-veterans CAN assume VA loans! You don't need to be a veteran to assume a VA mortgage.
Real Savings: Assume 2.75% vs New 6.75% Loan
💰 Assume 2.75% Mortgage
Home Price: $400,000
Mortgage Balance: $300,000 (assumed)
Your Cash: $100,000 (equity gap)
Interest Rate: 2.75%
Monthly P&I: $1,224
PMI: $0 (VA loan)
Total Payment: $1,224/month
Total Interest (25 years): $67,200
📈 New 6.75% Mortgage
Home Price: $400,000
Down Payment (5%): $20,000
Loan Amount: $380,000 (new)
Interest Rate: 6.75%
Monthly P&I: $2,464
PMI: $238/month
Total Payment: $2,702/month
Total Interest (30 years): $507,040
💰 Assumption Savings Breakdown:
- Monthly Savings: $1,478/month ($2,702 - $1,224)
- Annual Savings: $17,736/year
- 25-Year Savings: $443,400 in payments!
- Interest Savings: $439,840 ($507K - $67K)
- TOTAL VALUE: Save $439,840 in interest by assuming 2.75% loan!
⏰ Find Assumable Mortgages NOW!
Search VA/FHA listings with 2.75%-3.5% rates. Save $100K+!
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Step-by-Step: How to Assume a Mortgage (2026)
Step 1: Find Assumable Mortgages
Where to search:
- Zillow: Use "assumable" filter in search (under "More" filters)
- Realtor.com: Search "assumable mortgage" in keywords
- VA Listings: Many VA homes have assumable 2.75%-3.5% loans
- FHA Listings: FHA loans originated 2020-2021 = 2.5%-3.5% rates
- Your Realtor: Ask them to filter MLS for assumable loans
Step 2: Calculate Equity Gap
Formula: Equity Gap = Home Price - Mortgage Balance
Example:
Home Price: $400,000
Mortgage Balance: $300,000
Equity Gap: $100,000 (you need this in cash!)
Options to cover gap: Cash, HELOC, second mortgage, gift funds, seller financing
Step 3: Get Pre-Qualified for Assumption
Requirements:
- Credit Score: 620+ (FHA), 640+ (VA)
- Income: Qualify for existing payment (DTI <43%)
- Cash: Equity gap + closing costs ($3K-$8K)
- Documents: Tax returns (2 years), pay stubs (2 months), bank statements
Step 4: Make Offer + Assumption Contingency
Offer structure: Include "subject to mortgage assumption approval" contingency. Negotiate who pays assumption fee ($500-$1,000). Timeline: 45-90 days (longer than regular purchase).
Step 5: Lender Approval Process (45-90 Days)
What happens:
- Week 1-2: Submit application to seller's lender
- Week 3-6: Underwriting (credit, income, assets verification)
- Week 7-10: Appraisal, title search, final approval
- Week 11-12: Closing! Sign assumption agreement
Note: VA assumptions take 60-90 days. FHA 45-75 days. Be patient!
Step 6: Close & Assume Mortgage! 🎉
At closing: Pay equity gap ($100K-$300K), closing costs ($3K-$8K), assumption fee ($500-$1K). Sign assumption agreement. Mortgage transfers to your name at original 2.75%-3.5% rate. Congratulations! You just saved $100K-$200K in interest!
Pros & Cons: Mortgage Assumption
✅ PROS (Why Assume?)
- Huge Savings: Save $100K-$200K in interest (2.75% vs 6.75%)
- Lower Payment: $735-$1,478/month less than new mortgage
- No Appraisal Gap: Assume at balance, not appraised value
- Faster Equity: Lower rate = more principal paid monthly
- Locked Rate: Keep low rate for life of loan (25-30 years)
- Competitive Edge: Fewer buyers know about assumptions = less competition
❌ CONS (Challenges)
- Large Cash Needed: $100K-$300K equity gap (hard to finance)
- Slow Process: 45-90 days (vs 30-45 days regular purchase)
- Limited Inventory: Only VA/FHA/USDA loans assumable
- Lender Delays: Some lenders drag feet on assumptions
- Assumption Fee: $500-$1,000 extra cost
- Seller Liability: VA sellers risk entitlement until you refinance
Where to Find Assumable Mortgages (2026)
🔍 Zillow "Assumable" Filter
How to use: Go to Zillow.com → Search your area → Click "More" filters → Check "Assumable" box → Apply filters
Tip: Combine with "VA loan" or "FHA loan" keywords for best results. Look for homes listed 2020-2021 = lowest rates!
🏡 Realtor.com Keyword Search
How to use: Realtor.com → Search your area → Use keyword search: "assumable mortgage" or "VA assumable" or "FHA assumable"
Tip: Contact listing agent directly and ask: "What's the mortgage balance and rate?" to calculate equity gap.
🎖️ VA Loan Listings
Best source: Search MLS for "VA loan" + "assumable" in description. Many veterans don't advertise assumption = hidden gems!
Tip: Ask your realtor to filter MLS for VA loans originated 2020-2021 (2.5%-3.5% rates). These are GOLD!
🏠 FHA Loan Listings
Target: FHA homes purchased 2020-2021 = 2.5%-3.5% rates. Search MLS for "FHA approved" properties.
Tip: FHA assumptions easier than VA (no entitlement issues). Ask seller: "Is your FHA loan assumable?"
👨💼 Work with Assumption Specialist Realtor
Why: Most realtors don't understand assumptions. Find one who specializes in VA/FHA assumptions.
Tip: Ask: "How many mortgage assumptions have you closed?" If answer is 0-1, find another realtor!