The One Question That Could Save You $1,000+ Per Month

Millions of homeowners locked in mortgage rates between 2% and 3.5% during 2020–2022. Today, the average 30-year fixed rate sits near 6%–7%. That gap represents one of the biggest financial opportunities in the housing market right now — but only if you know how to take advantage of it.

The opportunity is called a loan assumption, and it starts with one question when you find a home you want to buy: “Does the seller have a VA, FHA, or USDA loan?”

If the answer is yes, that loan may be assumable — meaning you can take over the seller’s existing mortgage, including their interest rate, remaining balance, and loan terms. In a 6%+ rate environment, assuming a 2.5% or 3% mortgage is like finding money on the ground.

Which Loans Are Assumable?

Not all mortgages can be assumed. Conventional loans (backed by Fannie Mae or Freddie Mac) almost always include a “due on sale” clause that prevents assumption. But three government-backed loan types are assumable by design:

How to Find Homes with Assumable Mortgages

The challenge with assumptions is finding them. Sellers don’t usually advertise their loan type, and most real estate listings don’t mention whether the mortgage is assumable. Here are three proven methods to find these opportunities:

Method 1: Ask Your Real Estate Agent

Experienced agents can search public records and MLS data to identify properties with VA, FHA, or USDA loans. Some MLS systems flag government-backed loans directly. Tell your agent you’re specifically interested in homes with assumable mortgages and ask them to filter their searches accordingly. Not every agent knows how to do this — if yours doesn’t, it’s worth finding one who does.

Method 2: Contact Your Local Title Company

Title companies have access to public deed and lien records that show what type of loan is recorded against a property. Visit or call your local title company and ask their customer service team to search for properties in your target area (provide county, city, and ZIP code) that have an existing VA, FHA, or USDA mortgage on record. Narrow the search by providing your criteria: property type, bedroom count, assessed value range. The title company may charge a small service fee for this research, but the information is invaluable.

Method 3: Use Online Assumption Marketplaces

Several platforms have launched specifically to connect buyers with assumable mortgage listings. Sites like Roam, AssumeList, and FHA Pros aggregate properties with government-backed loans and make them searchable. These platforms are still relatively new, but they’re growing rapidly as assumption demand increases.

The Equity Gap: What You Need to Bring to the Table

When you assume a mortgage, you’re taking over the remaining loan balance — not the home’s current market value. If the home has appreciated since the seller bought it (and most have), there’s a gap between the purchase price and the assumable loan balance. You need to cover that gap.

Does the Math Still Work with a Second Mortgage?

This is the question most buyers ask — if I need a second loan to cover the equity gap, does the assumption still save me money? In most cases, yes.

The Assumption Process

• Step 1: Identify a property with a VA, FHA, or USDA loan and agree on a purchase price with the seller
• Step 2: The seller contacts their loan servicer and authorizes them to release loan information to you
• Step 3: You submit an assumption application to the seller’s servicer with full financial documentation (income, credit, assets)
• Step 4: The servicer underwrites your application — they need to confirm you can handle the payments
• Step 5: Once approved, you close on the assumption, pay the equity gap and assumption fees, and the loan transfers to your name

What Sellers Need to Know

If you’re selling a home with a low-rate VA, FHA, or USDA loan, your below-market rate is a selling advantage. You can market the assumable mortgage as a feature of your listing — it differentiates your property from every other home on the market and attracts buyers who are motivated by the rate savings.

However, sellers need to understand the entitlement and liability implications, particularly with VA loans. If a non-Veteran assumes your VA loan, your VA entitlement remains tied to that loan until it’s fully paid off. And you should always request a formal release of liability from the servicer at closing to confirm you’re no longer responsible for the mortgage if the buyer defaults.

VA Assumptions: Special Considerations

VA loan assumptions have unique advantages and nuances that set them apart from FHA and USDA assumptions:

• No buyer military service required: Anyone — Veteran or not — can assume a VA loan
• Assumption funding fee: Only 0.50% of the remaining balance (much lower than a new VA purchase fee of 2.15%+)
• Entitlement transfer: If a Veteran buyer substitutes their entitlement, the seller’s entitlement is fully restored for their next VA purchase
• Primary residence required: The buyer must intend to occupy the home as their primary residence
• Only one buyer at a time: The servicer processes one assumption application per loan — switching buyers mid-process restarts the clock

For a deeper dive on VA-specific assumptions, including the step-by-step servicer process and entitlement strategy, see our complete VA Loan Assumption Guide.

Is It Worth the Extra Effort?

Finding and closing an assumable mortgage requires more work than a standard purchase. You need to search specifically for government-backed loans, navigate a slower servicer process, and figure out how to cover the equity gap. It’s not as simple as browsing Zillow and making an offer.

But the financial payoff can be extraordinary. Saving $500–$1,000+ per month on your mortgage — potentially for 20–25+ years — adds up to hundreds of thousands of dollars. For buyers who are willing to invest the extra time and effort, an assumable mortgage at 2.5%–3.5% in a 6%+ rate market is one of the best financial moves available.