Here’s how assumable loans can empower your home-buying journey.

What is an assumable loan? In a nutshell, an assumable loan is a type of mortgage that allows a new buyer to take over an existing homeowner’s loan. It’s a straightforward process, and the appeal lies in cases where the existing loan carries a notably low interest rate, making it attractive for a new buyer.

For someone interested in assuming a loan, certain criteria need to be met. The loan typically needs to be a government-backed one, such as a VA, FHA, or USDA loan. Additionally, the homeowner will likely want their equity from the house.

Currently, many homeowners have accumulated substantial equity in their homes. For instance, if a homeowner initially bought a house for $400,000 and the property is now valued at $600,000, a new buyer seeking to take over the loan might need to cover the $200,000 difference. Despite this, it remains a viable option for both sellers and buyers.

If you’re considering this option either as a seller or a buyer, feel free to call or email us. We’re here and ready to assist you with the process.