An assumable mortgage is a home loan that allows a buyer to take over the existing mortgage terms and conditions from the seller. In simpler terms, the buyer “assumes” the remaining balance and terms of the mortgage instead of obtaining a new loan. This option can be attractive when interest rates are higher than the current mortgage rate.
While not all mortgage loans are assumable, certain types offer this feature. The three primary types of assumable mortgage loans are:
Below are some pros and cons of assumable mortgages and how to assume one from Bankrate.
Assuming a mortgage involves a series of steps, including:
Overall, it’s essential to carefully consider all factors before assuming a mortgage. If you decide to move forward, thoroughly review and complete all necessary paperwork, including any liability releases. As always, it’s best to consult with a trusted lender to ensure you make an informed decision.