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Buyers can save thousands by assuming a seller’s low-interest mortgage—here’s how it works.

If you're shopping for a home in today’s high-interest environment, there's a little-known strategy that could dramatically reduce your monthly payment: mortgage loan assumption. This option allows you to take over a seller’s existing mortgage—often at a much lower interest rate than what lenders are offering now.

?? What Is a Mortgage Loan Assumption?

A mortgage assumption means the buyer takes over the seller’s current mortgage, including the remaining balance, interest rate, and repayment terms. Instead of applying for a new loan at today’s rates (often 7% or higher), you “step into” the seller’s loan—potentially locking in a rate as low as 3–4%.

?? Why It Matters in 2025

With interest rates climbing, assuming a low-rate mortgage can save buyers hundreds of thousands over the life of the loan. For example:

Savings: $311,736 in interest alone.

? Which Loans Are Assumable?

Not all mortgages qualify. Here are the most common types:

• FHA Loans: Most are assumable. Buyer must qualify with the lender.
• VA Loans: Assumable even by non-veterans, but the seller’s entitlement may remain tied up.
• USDA Loans: Assumable for eligible rural properties.

Note: Most conventional loans include a “due-on-sale” clause, making them non-assumable.

?? What’s Required?

To assume a mortgage, buyers typically need:

• A qualifying credit score (580+ for FHA, 620+ for VA)
• A debt-to-income ratio under 43%
• Stable employment and income
• Payment of an assumption fee (usually $300–$900)

?? How to Find Assumable Homes

• Ask your Realtor® to identify listings with FHA, VA, or USDA loans.
• Look for homes purchased between 2020–2022 when rates were historically low.
• Confirm with the seller and their lender that the loan is assumable.

??? Final Thoughts

Mortgage assumptions aren’t just a financial loophole—they’re a strategic way to buy more home for less. If you’re an empty nester, first-time buyer, or relocating to the Catawba Valley market, this could be your ticket to affordability and legacy-building.

?? Want to explore assumable homes in your area? Let’s talk.

Sheree Byrd, Realtor®
 Faith Parker Properties
?? 828-556-5468

info@shereebyrdrealtor.com