What is an assumable loan and why it could help you sell for more

If you’re thinking about buying or selling a home in the greater Missoula, Montana area, you may have heard the term assumable loan/mortgage come up—but what does it really mean, and why is it becoming such a hot topic?

What is an assumable loan and why it could help you sell for more.

An assumable loan is a type of mortgage that allows a homebuyer to take over the seller’s existing loan and its terms—most importantly, the interest rate. In a market where current rates are significantly higher than they were just a few years ago, this can be a major financial advantage for buyers and a powerful selling tool for homeowners.

Why Sellers Should Pay Attention

I’ve recently worked on two different transactions where sellers had assumable loans, and both turned into multiple-offer situations. Why? Because today’s buyers are looking for every opportunity to make their dollars go further—and assuming a lower interest rate can save them hundreds of dollars a month.

For sellers, this means your home could stand out from the competition. In fact, buyers may be willing to pay top dollar simply for the chance to lock in a lower rate—especially if their alternative is financing at today’s higher rates.

Is Your Loan Assumable?

Not sure if your loan is assumable? Here’s how to find out:

• Check your original loan documents—they often state whether the mortgage is assumable.

• Call your loan servicer (the company you make your payments to) and ask directly. FHA, VA, and USDA loans are typically assumable, but conventional loans usually are not.

• Still unsure? I’m happy to help you look into it.
  

Knowing this simple detail about your mortgage could be the key to attracting serious buyers and maximizing your sale price.

Why Buyers Should Consider It

If you're buying, an assumable loan could give you access to an interest rate that is much lower than current market rates. Over the life of the loan, this can amount to tens of thousands of dollars in savings. Plus, it may make certain homes more affordable than they would otherwise be.

Things to Keep in Mind

• The buyer must still qualify with the lender, just like with a traditional loan.

• You may need to bring additional cash to the table to cover the difference between the sale price and the remaining loan balance.
  

Whether you're buying or selling, having an agent who understands the nuances of assumable loans can make a big difference. I’ve been through the process with multiple clients and can help you navigate everything from lender communication to offer strategy.

Have questions? Let's talk and please give me a call 406-531-0627 or send me an email: junemurray@kw.com.  

I am not a mortgage lender, and this blog post is for informational purposes only. If you’re considering an assumable loan/mortgage or want to know if your current loan qualifies, please consult with a licensed mortgage lender for personalized advice and guidance.