What Is An Assumable Mortgage?

Assumable mortgage
With rising interest rates, an assumable mortgage may be a great option.

It is no secret that home prices are high these days. In particular, high demand states such as Florida are seeing these prices hold up even as buyer demand has decreased. Add in rising interest rates and many home buyers have been priced out of the market entirely. With this said, there is one segment of the real estate market that has the potential to outperform the rest. This segment is the assumable mortgage market.

Benefits of an assumable mortgage

An assumable mortgage is when the buyer takes over the seller’s existing mortgage at closing in lieu of getting a new loan. This means that the buyer can take over the loan terms and conditions, including the interest rate, monthly payment, and repayment period. Currently, the only loans in the market with a standard qualifying assumption clause are VA, FHA and USDA loans. There are several benefits of an assumable mortgage, particularly in a market where interest rates have been rising. Some of these benefits are as follows:

  • The buyer can save money: If interest rates have gone up since the original loan was taken out, the buyer may be able to assume the loan at a lower interest rate. This can save them a significant amount of money over the life of the loan.
  • An assumable mortgage can be easier than getting a new loan: With an assumable mortgage, the buyer does not have to go through the same underwriting process, which can be time-consuming and difficult.
  • Assuming a mortgage can get you into a home quicker: If the buyer has good credit but does not have a lot of money saved up for a down payment, they may be able to assume a mortgage with a low down payment.


Overall, assuming a mortgage can be a good option for buyers who are looking to save money, get into a home quickly, or have good credit but not a lot of money saved up for a down payment. However, it is important to understand the risks associated with assuming a mortgage before making a decision. As always, it is highly recommended to have a team of trusted real estate professionals to consult. A local and knowledgeable real estate agent, mortgage broker, and real estate attorney will help guide you through this process.

Are you looking to buy or sell property in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet!

By natasha moore

REALTOR® with Live South Florida Realty, Inc.