How Can You Assume Mortgage When Buying a Property?

Question

Can you assume a mortgage on a conventional or FHA loan?

For example, the house is listed for $500k and it has $300k in mortgage left at 3%

Could I offer $500k and "assume" the mortgage of the seller?

So in conclusion, it would be financed as a conventional with 20% down ($100k), and out of the $400k, $300k will be at 3% and the remaining $100k will be at the current mortgage rate?

Does anyone know how it works and best practices?

Elias Halvorson · Answer

Sorry, government loans are USDA, FHA, or VA. Conventional are not government loans ie not assumable. For government loans you would have to live in them.

Bob Asad · Answer

Do you know if assumable loans have prepayment penalties or balloon payments when they transfer? (Are the rules whatever is being assumed from the original buyer?)

Bob Asad · Answer

What if it's FHA or Conventional, are these assumable?

Also not sure how it would work as an investment, do you have to live in the property?

Elias Halvorson · Answer

You can assume any government loan as long as you meet the requirements. For VA loans, I think I can speak for almost all of us in stating no veteran is likely going to let you assume the loan unless you also are a veteran and can use your VA loan entitlement. The VA loan benefit is one of the biggest perks of being a Veteran.

Eugenio G. · Answer

FHA loans are generally assumable. Talk to your agent and loan officer.

How Can You Assume Mortgage When Buying a Property?

5 Replies