02/13/2026
ASSUMBLE LOAN
What is an assumable loan? Today, this topic is rising to the forefront on how to buy a home. An assumable loan is a loan that can be taken over by a new buyer under the same terms and conditions the original buyer received for their mortgage.
Typically, the new buyer has to qualify so the original buyer is not liable. If it’s a VA loan, the original buyer may also want a substitution of eligibility to go along with the substitution of liability. A majority of loans that we’ve done in the previous 4-5 years had rates of 4% or better. The trick is to make up the sellers (1st buyer) equity with a cash down payment. Example, seller owes $400,000. Property lists and sells at $450,000. The buyer pays $50,000 down and assumes a 4% mortgage and payment. Seller receives the net from the $50,000 minus fees. Same result for seller as long as they got their lender to release liability.
The liability is the main concern for assumable loans. In the old days, the release of liability was not done. This causes a huge amount of foreclosures and credit issues so always get a substitution of liability. This can be a great way to beat today’s rates and buy a home.
Call us and we’ll show you how!
Thanks,
Brian Maecker
GRI, ABR, CRS, SRES