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The Assumable Mortgage: Taking Over a Seller's Loan

When interest rates rise, ask about an Assumable Mortgage.


What is an assumable mortgage?

An assumable mortgage is a loan that a buyer can take over from the seller of a home, often with little or no change in the loan’s terms, including the interest rate. After obtaining a lender’s approval, a qualified buyer agrees to make future payments as if they took out the original loan on the home.

What types of loans are assumable?

  • All government loans, such as FHA and VA loans
  • All conventional adjustable rate mortgage (ARM) loans
  • Some non-conforming ARM loans1

Advantages of an assumable mortgage:

  • If the seller’s interest rate is lower than the rate a buyer can obtain based on current market rates or credit history, the buyer may enjoy significant savings.
  • Fewer closing costs are associated with an assumable mortgage.
  • Because not all mortgages are assumable, a seller may also benefit by marketing this advantage when competing with other homes on the market.

Considerations of an assumable mortgage:

  • A buyer will be required to qualify for the terms of the existing loan in order to assume the mortgage.
  • If the sale price of the home is more than the mortgage amount remaining on the home, a buyer will need to pay for the difference at closing out-of-pocket.
  • Certain conditions will need to be met based on the existing loan type.

If you have questions about an assumable mortgage, please contact a mortgage consultant near you!




1. Ask your local mortgage consultant to discuss assumable non-conforming loan programs for which you may be eligible.

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance.  Licensed by the Delaware State Bank Commissioner.  Also licensed in District of Columbia, Florida, Georgia, Indiana, Maryland, Michigan, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia.

NMLS ID #75164 (NMLS Consumer Access at

©2018 Prosperity Home Mortgage, LLC. All Rights Reserved.

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