Can Buyers Assume Your Mortgage? What Home Sellers Need to Know

Thinking of selling your home but worried about today's higher interest rates? Some sellers wonder if they can let the buyer take over their existing mortgage to preserve a low rate. While it sounds like a good idea, there's a catch: most mortgages in the U.S. are not assumable.

In fact, around 80% of conventional fixed-rate loans cannot be transferred to a new buyer. That means when the title to your home transfers, the loan must be paid off in full. Attempting to bypass this can put your credit at risk because you remain legally responsible for the original mortgage.

FHA, VA, and some adjustable-rate conventional loans are assumable, but the buyer must contact your mortgage servicer and qualify. Only after this process can you be released from liability. Otherwise, if the buyer misses a payment, it affects your credit - not theirs.

In short, unless your mortgage explicitly allows assumption, letting someone take over your payments is extremely risky. Always confirm with your lender or servicer before considering any arrangement. Protect your credit and ensure a smooth, legal sale.

Understanding the rules around assumable mortgages can help you make informed decisions and avoid financial pitfalls when selling your home. Learn more about FHA and VA loan options and how they can benefit both buyers and sellers.

Later, nerds.