How do I know if I qualify to assume a loan?

Buyers must meet the lender’s credit, income, and debt-to-income requirements. Our team will guide you through the qualification process. As a Buyer, you can qualify for ("afford") a bigger/different home with a higher sale price because your new interest rate is much lower than today's conventional interest rate.

What costs are involved in assuming a loan?

Costs can include an assumption fee, credit report fee, escrow/title fees, and any required down payment or equity contribution.

Will assuming a loan affect my credit score?

Yes, the new loan will appear on your credit report. Timely payments can help build credit, but late payments can negatively impact it.

How long does the assumption process take?

Typically 30–40 days, depending on the lender for the loan to be assumed and the complexity of the file.

Do I get a lower interest rate by assuming a loan?

You take over the seller’s existing rate, which may be lower than current market rates. (You also take over their existing term ("remaining years on the loan").

Is a down payment required?

If there’s a difference between the home purchase price and remaining loan balance, the Buyer needs to pay the Seller the difference. Everything in real estate is negotiable... there are many different ways to fund this difference. Our team can walk you thru your options, for instance: savings, 401K funds, loan or new 2nd mortgage, line of credit, Seller financing, etc.

Info from our lender friends:
FHA assumptions - No minimum equity required if buyer meets standard credit score (≥580) and debt ratio guidelines. If buyer credit score is below 580, FHA requires 10% equity in the property.

VA Loan - No equity requirement in most cases.

Do I need an Title and Escrow company or Attorney?

Yes. Escrow and title are required to record the assumption and transfer property ownership properly. You are always welcome to have your attorney review the paperwork and give advice.

What documents are required for the assumption?

A contract to purchase your home! We HIGHLY SUGGEST connecting with our team to prepare your documents prior to making offers on houses - needed docs include, but are not limited to: credit report, income verification, mortgage statement, loan documents, and any VA/FHA/USDA-specific forms.