An assumable mortgage is when a home buyer takes over the seller’s existing mortgage. When assuming a mortgage, the same terms and conditions from the seller’s mortgage are transferred to the buyer. A mortgage loan assumption means the buyer does not have to apply for their own mortgage. Instead, they “assume” the original mortgage’s interest rate, repayment period, and remaining balance.
An assumable loan has pros and cons for buyers and sellers. Therefore, knowing how assumable mortgages work can help you decide on the best type of home loan for your circumstances.
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