How to Sell a Home with an Assumable Mortgage (and Why It’s a Hidden Advantage)

Drew Trombley

Drew Trombley

— 3 min read
How to Sell a Home with an Assumable Mortgage (and Why It’s a Hidden Advantage)
Photo by Tierra Mallorca / Unsplash

What Is an Assumable Mortgage?

If you're selling a home with a mortgage, an assumable loan could be your best-kept secret. Not all mortgages can be transferred, but if yours qualifies, you can offer buyers a unique opportunity: taking over your loan terms instead of getting a new mortgage.

With today’s rising interest rates, assumable mortgages are a powerful selling tool—potentially making your home far more attractive to buyers.

Why an Assumable Mortgage Gives You a Huge Advantage

Most homebuyers today are dealing with high mortgage rates. But if your mortgage was locked in at a lower rate, an assumable loan could save them tens of thousands of dollars over the life of the loan.

Key Benefits for Sellers:

✅ Attract More Buyers – Homebuyers will look for creative ways to save money in a high-interest market.
✅ Faster Home Sale – Your low-interest mortgage is a major selling point.
✅ Competitive Edge – If buyers are choosing between your home and another, your assumable mortgage can be the deciding factor.
✅ Potentially Higher Offers – Buyers may be willing to pay a bit more for the property since they'll save money on interest over time.

Key Benefits for Buyers:

✅ Lower Interest Rate – They inherit your mortgage instead of applying for a new one.
✅ Faster Closing Process – Since they're assuming the loan, there's less paperwork than getting approved for a new mortgage.
✅ Lower Closing Costs – Traditional mortgage origination fees and other closing costs may be reduced.

Does Your Mortgage Qualify for Assumption?

Not all loans are assumable. Here's how to find out if yours is:

Loans That Are Usually Assumable:

  • FHA loans (Federal Housing Administration)
  • VA loans (Veterans Affairs) – The buyer doesn’t have to be a veteran, but the seller loses VA eligibility unless the buyer is also a veteran.
  • USDA loans (United States Department of Agriculture)

Loans That Are NOT Assumable (Without Lender Approval):

  • Conventional loans – Most are not assumable unless the lender makes an exception.
  • Jumbo loans – High-value home loans generally do not qualify for assumption.

How to Check If Your Mortgage Is Assumable

  1. Review Your Mortgage Agreement – Look for an assumption clause in your loan documents.
  2. Call Your Lender – They can confirm if your loan qualifies for assumption.
  3. Understand the Terms – Even if assumable, the lender may require the buyer to meet strict qualifications.

Step-by-Step: How to Sell a Home with an Assumable Mortgage

Step 1: Market Your Home as “Assumable Mortgage Available”

  • Include "Assumable Mortgage – Low Rate" in your listing title.
  • Highlight the interest rate and monthly payment savings in your description.
  • If possible, compare your loan’s rate to current market rates.

Step 2: Find a Qualified Buyer

  • The buyer must meet the lender’s approval criteria (credit score, income, debt-to-income ratio).
  • Some loans require a down payment from the buyer to match the remaining balance.

Step 3: Work with Your Lender

  • The buyer applies to assume the loan with your mortgage provider.
  • The lender evaluates the buyer’s financials (similar to a traditional mortgage application).
  • The lender approves or denies the assumption based on their guidelines.

Step 4: Transfer the Mortgage

  • If approved, the buyer takes over your loan terms.
  • Ensure that you're released from liability on the mortgage (some lenders require a formal release).
  • Close the sale just like a standard real estate transaction.

1. Will You Still Be Liable After the Sale?

Some mortgage assumptions do not release the seller from liability. Ensure your lender removes you from responsibility once the mortgage is transferred.

2. Will You Owe a “Due-on-Sale” Clause?

If your loan does not allow assumption, transferring it could trigger a due-on-sale clause, meaning the full mortgage balance would be due immediately.

3. Will the Buyer Need Additional Financing?

If your remaining loan balance is less than your home’s sale price, the buyer may need to secure a second mortgage or pay the difference in cash.

How to Make an Assumable Mortgage Work for You

If your mortgage is assumable, you have a powerful tool to sell your home faster. Buyers looking to save money on interest will jump on the opportunity to assume a low-rate loan.

Download the 2025 Mortgage Transfer Home Selling Guide

Want to make sure you maximize your home sale with an assumable mortgage?

📥 Download the Official 2025 Mortgage Transfer Home Selling Guide here:

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