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By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.

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What Is an Assumable Loan?

An assumable loan means a buyer can take over your existing mortgage, including the rate, balance, and terms, instead of getting a brand-new loan. If your interest rate is lower than today’s market rate, this could make your home more attractive to buyers.

Why They are Attractive to Buyers

  • Lower interest rate than the current market rates
  • Lower monthly payment potential
  • Fewer closing costs compared to a new mortgage
  • Appraisals/reports may be waived, saving money
  • Can make your listing stand out against other homes

How to Know if Your Loan is Assumable

Loan Type Assumable? Notes
FHA ✅ Yes Buyer must qualify with the lender; small assumption fee
VA ✅ Yes Buyer must qualify; seller’s entitlement may stay tied up unless buyer is VA-eligible
USDA ✅ Yes Qualification required: rural property loans
Conventional ❌ Generally No Most have a “due-on-sale” clause
Private/Seller-Financed ✅ Possible Depends on the note/deed of trust terms

Challenges & Considerations

  • Equity gap: Buyers may need a large down payment or secondary financing
  • Lender processing time: Can take longer than a traditional sale
  • Qualification: Buyers must meet the lender’s credit/income requirements
  • VA entitlement: Sellers may lose the ability to use the VA benefit until the entitlement is restored
  • Buyer must be buying primary residence
  • No corporations, trusts; has to close in individual’s name.

Assumable Loan Process

Is My Loan Assumable? Here’s What To Check:

1. Check Your Loan Documents

Look at your Promissory Note and Deed of Trust or Mortgage. Search for:

  • Assumption Clause
  • Due-on-Sale

2. Call Your Loan Servicer. Ask:

“Can you confirm whether my loan is assumable and, if so, what the process and fees will be?” The phone number is on your monthly mortgage statement.

Thinking of Selling?
If you want to know whether your loan is assumable and how it could help you sell for more, reach out today. I’ll help check your loan type and guide you through the process.

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