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What is an Assumable Mortgage?
An assumable mortgage is a type of home loan that allows a homebuyer to take over the existing mortgage terms from the seller. Many government-backed loans, such as FHA and VA loans, are eligible for assumption, and millions of these mortgages are available.
Why do buyers use Assumable Mortgage?
Assuming a mortgage can seem complex and unfamiliar. Earl simplify the process by providing white-glove support and expertise at every step.
Earl helps home buyers find and purchase homes with a low-rate assumable mortgage included. Once you find your dream home, Our team manages the process of assuming a low-interest rate mortgage, helping buyers save thousands a year on mortgage payments compared to buying with a traditional mortgage at today’s rates. On average, buyers who use our service and save $15,000 in mortgage payments annually.
Why is an assumable mortgage valuable?
When interest rates on mortgages are high, assuming a mortgage with a rate as low as 2% allows buyers to save up to thousands monthly compared to buying a home with a traditional mortgage at today’s rates. A low-rate assumable mortgage could be the key to finding your dream home at an affordable price.
Will an assumption work for me?
An assumption might be a suitable option for you if you meet the lender’s qualifications. We also offer Roam Boost to help buyers reduce the down payment required to a minimum of 15%.
What does it take to qualify for an assumption?
To qualify, you must meet the current FHA, VA, or USDA loan requirements depending on the type of loan you are assuming. This typically means a minimum credit score of 580, although most lenders prefer 620-640. Your debt-to-income ratio should be under the 50% max under FHA guidelines. Additional information such as employment history, explanations of income for each applicant, and asset verification for a down payment may be needed to process the loan.
Will you approve me for the loan?
No, we do not handle mortgage approvals. The lender or servicer who holds the original mortgage handles the approval. Roam’s role is to facilitate the process and provide coordination, support and guidance along the way.
Do I need a preapproval?
Yes, most listing agents will not entertain an offer without a preapproval. Once your offer is accepted, the seller’s servicer also underwrites the loan and checks your credit score, debt-to-income ratio, and other financial factors to see if you meet minimum requirements.
Can I assume a VA loan if I’m not a veteran?
Yes. Non-veterans can assume a VA loan, provided they meet the lender’s VA criteria. When a qualified buyer assumes a VA mortgage from a veteran or active-duty service member, the seller’s VA loan entitlement remains tied to the assumed loan until the buyer pays off or refinances the loan. This process restores the veteran seller’s entitlement, enabling them to use their VA benefit for a future home purchase.
How much are typical closing costs and can they be wrapped into the assumable loan?
Closing costs can vary significantly based on the specifics of the transaction. They typically include fees for services such as home inspection, title search, and other administrative tasks. Generally, these costs cannot be wrapped into the assumable loan. However, if you’re using a second mortgage to finance the home, these costs could potentially be incorporated into that loan.
Can I put more money down to lower my payment?
For the mortgage you are assuming, the payoff schedule remains the same, and putting more money down would only affect the outstanding mortgage balance. However, if you are using a second mortgage to finance some of the home, putting more money down reduces the amount you need to borrow, which can lower your total monthly mortgage payments.
Do I have to pay a down payment?
The required down payment amount for an assumable mortgage is the difference between the purchase price and the seller’s remaining loan balance. You can either use cash, a second mortgage, or a mix of the two to fund the down payment. If you need help connecting with a secondary mortgage provider, our partner SpringEQ offers assumption-specific options.
I am interested in buying a home with Earl, what should I do?
Earl has compiled available listings with low-rate assumable mortgages for you to browse. To get started, enter the city, state, zip code, or school district you’re interested in purchasing in. Utilize the search filters to narrow down your search. Click “Get Notified” to save your search preferences and activate listing notifications—we’ll email you as soon as new listings match your criteria.
