Mortgage Assumption Fee 2026: Complete Cost Guide (Save $15K)
💰 Mortgage Assumption Fees 2026: The Real Cost
Total assumption costs: $2,500-$8,000 (assumption fee $500-$5,000 + closing costs $2,000-$3,000). Compare to NEW loan costs of $12,000-$20,000 = Save $10,000-$15,000+ by assuming!
PLUS: Assume a 3.5% rate vs today's 6.5% = Save $450/month ($162,000 over 30 years) on $400K loan. Total savings: $177,000+ vs new mortgage!
Thinking about assuming a mortgage to lock in a low rate? Smart move! But what are the ACTUAL costs and fees involved?
According to Freddie Mac (January 2026), assumable mortgages save buyers an average of $15,000 in closing costs and $162,000 in interest over 30 years compared to getting a new loan at today's rates. Before assuming, compare current mortgage rates to ensure assumption is your best option.
📊 Complete Assumption Fee Breakdown 2026
| Fee Type | VA Loan | FHA Loan | Conventional |
|---|---|---|---|
| Assumption Fee | $300-$500 | $900 | $1,000-$5,000 |
| Processing Fee | $0-$500 | $0-$500 | $500-$1,000 |
| Credit Report | $50-$100 | $50-$100 | $50-$100 |
| Appraisal | $500-$700 | $500-$700 | $500-$700 |
| Title Search | $300-$500 | $300-$500 | $300-$500 |
| Title Insurance | $800-$1,200 | $800-$1,200 | $800-$1,200 |
| Attorney/Escrow | $500-$1,000 | $500-$1,000 | $500-$1,000 |
| Recording Fees | $100-$300 | $100-$300 | $100-$300 |
| TOTAL COSTS | $2,550-$4,800 | $3,150-$5,200 | $3,750-$9,800 |
🏡 Find Assumable Mortgages Near You
Search homes with assumable VA, FHA, and conventional loans. Lock in low rates (3-4%) and save $15K+ in closing costs vs new mortgage.
Find Assumable Homes →✓ Low-rate mortgages ✓ Save $15K+ ✓ VA/FHA/Conventional ✓ Expert guidance
📋 Complete Assumption Process: 10-Step Timeline
How to Assume a Mortgage: Day-by-Day Guide
Step 1: Find Assumable Mortgage (Day 1-30)
Search MLS listings for "assumable mortgage" or "VA/FHA assumable." Check listing details for loan type, interest rate, and remaining balance. Best finds: 3-4% VA/FHA loans from 2020-2021. Use sites like Roam.com, Assumable.com, or ask your realtor to filter for assumable loans. Also compare new loan rates to calculate your true savings.
Step 2: Calculate Down Payment Required (Day 1)
Formula: Home Price - Loan Balance = Down Payment Needed. Example: $500K home with $350K assumable loan = $150K down payment required. This is often HIGHER than traditional 3.5-20% down because you're covering seller's equity. Ensure you have cash available. If the down payment is too high, get pre-approved for a new loan with lower down payment requirements.
Step 3: Make Offer with Assumption Contingency (Day 30-35)
Include in offer: "Buyer to assume existing [VA/FHA/Conventional] loan at [X%] rate, subject to lender approval." Negotiate assumption fee (who pays: buyer, seller, or split). Get seller's loan details: servicer name, loan number, current balance, payment amount.
Step 4: Contact Loan Servicer (Day 35-40)
Call servicer's assumption department (NOT customer service). Say: "I'm purchasing a home and want to assume the existing [loan type] loan." Request assumption package: application, qualification requirements, fee schedule, timeline. Get direct contact info for assumption specialist.
Step 5: Submit Assumption Application (Day 40-45)
Required documents: (1) Purchase contract, (2) Pay stubs (2 months), (3) W-2s (2 years), (4) Tax returns (2 years if self-employed), (5) Bank statements (2 months), (6) Credit authorization, (7) Assumption fee payment. Submit via servicer's portal or email.
Step 6: Lender Reviews & Underwrites (Day 45-75)
Servicer underwrites like new loan: verify income, check credit (typically 620+ required), calculate DTI (usually 43% max), order appraisal ($500-$700). Timeline: 20-45 days. Respond quickly to any document requests to avoid delays. VA/FHA: Easier approval. Conventional: Stricter. While waiting for approval, shop backup loan options in case assumption is denied.
Step 7: Receive Assumption Approval (Day 75-80)
Servicer issues approval letter outlining: (1) Approved loan amount, (2) Interest rate (stays same), (3) Remaining term, (4) Monthly payment, (5) Assumption fee, (6) Closing requirements. Review carefully. If denied, ask for reconsideration or provide additional documentation.
Step 8: Order Title & Schedule Closing (Day 80-85)
Title company orders: (1) Title search ($300-$500), (2) Title insurance ($800-$1,200), (3) Prepares closing documents. Schedule closing with all parties: buyer, seller, title company, servicer representative (if required). Coordinate wire transfer for down payment + closing costs.
Step 9: Close & Sign Assumption Agreement (Day 90)
Sign: (1) Assumption agreement (transfers loan to you), (2) Deed (transfers property), (3) Seller release (releases seller from liability), (4) Closing disclosure (itemizes all costs). Wire down payment + closing costs. Receive keys. Loan is now in YOUR name at original rate!
Step 10: Make First Payment (30 days after closing)
Servicer sends welcome packet with: (1) New loan number, (2) Payment portal login, (3) First payment due date (usually 30 days after closing), (4) Escrow account details (if applicable). Set up autopay. Verify payment is reporting to credit bureaus under YOUR name.
💰 VA vs FHA vs Conventional Assumption: Complete Comparison
VA Loan Assumption: Cheapest & Easiest
✅ Advantages
- • Lowest assumption fee: $300-$500 (0.5% of balance, capped at $500)
- • No down payment minimum: If you have VA entitlement (veterans/active duty)
- • Easier qualification: More lenient credit (580+ often accepted) and DTI requirements
- • No PMI: Even with 0% down if using VA entitlement
- • Seller released from liability: After assumption, seller's VA entitlement restored
- • Total costs: $2,550-$4,800 (cheapest option)
❌ Disadvantages
- • VA entitlement required for 0% down: Non-veterans need 25% down (or more if equity gap)
- • Funding fee: 2.3% if you're veteran with no entitlement left ($9,200 on $400K loan)
- • Occupancy requirement: Must be primary residence (no investment properties)
- • Property standards: Must meet VA minimum property requirements (MPRs)
🎯 Best For
Veterans/active duty assuming another veteran's loan (0% down + lowest fees). Non-veterans with large down payment who want lowest assumption costs. Buyers seeking 3-4% rate on primary residence. Even with VA loans, it's wise to compare new VA loan rates to confirm assumption saves you money.
FHA Loan Assumption: Middle Ground
✅ Advantages
- • Fixed assumption fee: $900 flat (regardless of loan amount)
- • Low down payment: 3.5% minimum (if no equity gap)
- • Easier qualification: 580+ credit score, 43% DTI accepted
- • No veteran requirement: Anyone can assume FHA loan
- • Seller released from liability: After assumption approval
- • Total costs: $3,150-$5,200 (mid-range)
❌ Disadvantages
- • MIP for life: If loan originated after June 2013, you inherit lifetime MIP (~$250-$350/month)
- • Upfront MIP: 1.75% of loan balance due at closing ($7,000 on $400K loan)
- • Occupancy requirement: Must be primary residence (no investment properties)
- • Property standards: Must meet FHA minimum property standards
🎯 Best For
First-time buyers with limited down payment (3.5%). Non-veterans seeking low assumption fee. Buyers with 580-620 credit who may not qualify for conventional. Those willing to pay MIP for 3-4% rate. Before committing, get pre-approved for FHA loans to compare total costs with and without MIP.
Conventional Loan Assumption: Rare & Expensive
✅ Advantages
- • No MIP/PMI: If loan balance is ≤80% of home value
- • No occupancy requirement: Can use for investment property (if lender allows)
- • Higher loan limits: Conventional conforming up to $766,550 (2026)
- • Seller released from liability: After assumption approval
❌ Disadvantages
- • Highest assumption fee: $1,000-$5,000 (0.25%-1% of balance)
- • Rarely assumable: Most conventional loans after 1988 are NOT assumable
- • Stricter qualification: 680+ credit, 36% DTI, full income verification
- • PMI if <20% equity: Must pay PMI until 20% equity reached
- • Total costs: $3,750-$9,800 (most expensive)
🎯 Best For
Buyers with excellent credit (720+) and large down payment. Those seeking investment property with assumable loan. Buyers who found rare assumable conventional loan with 3-4% rate and want to avoid MIP. With great credit, compare conventional loan rates to ensure assumption is worth the higher fees.
📊 Down Payment Calculator: Real Assumption Scenarios
Scenario 1: $500K Home, $350K VA Loan Balance (3.5% Rate)
Down Payment Required: $500K - $350K = $150,000
Assumption Costs: $2,800 (VA fee $500 + closing costs $2,300)
Total Cash Needed: $152,800
Monthly Payment: $1,571 (P&I on $350K at 3.5%)
Savings vs New Loan: New 6.5% loan = $2,212/month. You save $641/month = $230,760 over 30 years! To verify these savings, get current rate quotes from multiple lenders before proceeding with assumption.
Scenario 2: $400K Home, $320K FHA Loan Balance (4.0% Rate)
Down Payment Required: $400K - $320K = $80,000
Assumption Costs: $3,500 (FHA fee $900 + closing $2,600)
Upfront MIP: $5,600 (1.75% of $320K)
Total Cash Needed: $89,100
Monthly Payment: $1,528 (P&I) + $267 (MIP) = $1,795/month
Savings vs New Loan: New 6.5% loan = $2,021/month. You save $226/month = $81,360 over 30 years!
Scenario 3: $600K Home, $400K Conventional Loan (3.25% Rate)
Down Payment Required: $600K - $400K = $200,000
Assumption Costs: $5,500 (Conv fee $2,000 + closing $3,500)
Total Cash Needed: $205,500
Monthly Payment: $1,741 (P&I on $400K at 3.25%)
Savings vs New Loan: New 6.5% loan = $2,528/month. You save $787/month = $283,320 over 30 years!
❓ Frequently Asked Questions
How much does it cost to assume a mortgage in 2026?
Total assumption costs: $2,500-$9,800 depending on loan type. VA loans cheapest ($2,550-$4,800), FHA mid-range ($3,150-$5,200), conventional highest ($3,750-$9,800). This is 50-75% LESS than new loan closing costs ($12,000-$20,000), saving you $10,000-$15,000+.
What is the VA loan assumption fee?
VA assumption fee: $300-$500 (0.5% of loan balance, capped at $500). Example: $400K VA loan = $500 assumption fee. Total VA assumption costs including closing: $2,550-$4,800. This is the CHEAPEST assumable loan option and saves $15K+ vs new VA loan.
What is the FHA loan assumption fee?
FHA assumption fee: $900 flat fee (regardless of loan amount). Total FHA assumption costs including closing: $3,150-$5,200. FHA assumptions are popular because: (1) fixed $900 fee, (2) easier qualification than conventional, (3) no down payment minimum if you have equity.
How much does it cost to assume a conventional mortgage?
Conventional assumption fee: $1,000-$5,000 (varies by lender, typically 0.25%-1% of loan balance). Total costs: $3,750-$9,800. Note: Most conventional loans originated after 1988 are NOT assumable unless specifically stated. Check your loan documents for "assumption clause."
Is assuming a mortgage cheaper than getting a new loan?
Yes! Save $10K-$15K in closing costs. New loan costs: $12,000-$20,000 (origination, points, appraisal, title, etc.). Assumption costs: $2,500-$9,800. PLUS save $162,000+ in interest by assuming 3.5% rate vs 6.5% new rate on $400K loan. Total savings: $177,000+ over 30 years!
Do I need a down payment to assume a mortgage?
Yes, if home price exceeds loan balance. Example: Home sells for $500K, assumable loan balance is $350K → You need $150K down payment (or second mortgage). If home price = loan balance, no down payment needed. VA loans: Non-veterans need 25% down minimum.
Can seller pay assumption fees?
Yes! Negotiate seller concessions. Seller can pay up to 6% of purchase price in closing costs, which can cover assumption fees, title insurance, and other costs. This is common when seller wants to market "assumable low-rate mortgage" as selling point. Get it in writing in purchase contract.
How long does mortgage assumption take?
45-90 days average. Timeline: Submit application (Day 1) → Credit/income verification (7-14 days) → Appraisal (14-21 days) → Lender approval (30-60 days) → Closing (45-90 days). VA assumptions fastest (45-60 days), conventional slowest (60-90 days). Start early!
What credit score do I need to assume a mortgage?
Minimum 580-620 depending on loan type. VA loans: 580+ (flexible). FHA loans: 580+ (3.5% down) or 500-579 (10% down). Conventional: 620+ minimum. However, higher scores (700+) get faster approval. Lender will verify income, employment, and debt-to-income ratio (typically 43% max).
Are assumption fees tax deductible?
Some fees are deductible if you itemize. Deductible: Mortgage interest, property taxes, points (if paid). NOT deductible: Assumption fee, title insurance, appraisal, credit report, attorney fees. Consult tax professional. Assumption fees are typically lower than new loan costs, so tax benefit is less important.
🏆 Ready to Assume a Low-Rate Mortgage?
Find homes with assumable mortgages, calculate your savings, and connect with assumption specialists. Save $15K+ in closing costs and $162K+ in interest!
Find Assumable Mortgages →✓ Low rates (3-4%) ✓ Save $177K+ ✓ Expert guidance ✓ Fast approval