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Disclaimer: Beginning January 1, 2020, the VA funding fee will be changing to a range of 1.4% – 3.6% based on factors like your down payment or equity amount, your service status and whether this is a first or subsequent use of a VA loan.

VA Loans Q&A Google Hangout - Quicken Loans Zing Blog

Have you ever wondered what an assumable mortgage is? Maybe a better question is whether you’ve ever heard of an assumable mortgage. Either way, I’m sure you’ve heard that old saying about assuming things; the one that says, “When you assume something, you…” well, you know what it says. Did you ever assume that the saying about assumptions applied to assumable mortgages? I hope not.

Assumable Mortgage

Assuming a mortgage doesn’t have anything to do with that old saying about assumptions. All it means is that someone assumes, or takes over, someone else’s mortgage.

On our VA Loans Q&A with the Department of Veterans Affairs, Military.com and several other organizations, someone asked this two-part question: What is an assumable mortgage, and, if the veteran doesn’t use his or her VA loan benefit, can his or her children use the VA loan benefit through an assumable mortgage?

VA Loan Assumption

Anyone can assume a VA mortgage – as long as their income and credit qualify – but children of veterans can’t get VA loans themselves (unless, of course, they join the military as well). You have to be a current service member, veteran or surviving spouse of a veteran to qualify for a VA loan.

Here are a few of the main requirements for assuming a VA loan:

  • If the person assuming the loan isn’t a veteran, then the veteran will lose their remaining entitlement benefits because the VA benefit stays with the mortgage, not the individual.
  • There’s also a funding fee that must be paid: 0.5% of the existing principal balance. Either the original owner or the new mortgage holder can pay this fee.
  • Once the assumer gets approved for the loan and the county receives the new deed, the current owner is released from all liability for the mortgage.

In the Q&A, Terry Howell of Military.com also noted that both the Department of Veterans Affairs and the lender have to agree to the loan assumption.

For more info on assumable VA mortgages, check out the VA Q&A video below!



Do you have other questions about VA loans, assuming loans or assuming things in general (pretty sure we already covered that last part)? Contact a Home Loan Expert today!

 

 

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This Post Has 156 Comments

  1. My son and his wife are thinking about selling their house and was inquiring if they would qualify for my VA loan since I never used it. I understand they are not eligible–but could I buy the house using my VA loan and then assuming they qualify could they assume the mortgage?? And how soon after I purchase the home can I turn around and sell it to them and have them assume the VA loan? And what can kind of fees are involved ? Thank you.

    1. Hi Chris:

      That’s a complex question. It would be best to have a Home Loan Expert reach out and go over this with you. They’ll be in contact.

      Thanks,
      Kevin Graham

  2. We are in the process of having our home on the market for assumption. If someone non military assumes it what exactly happens for us? We lose all of out entitlement or just that portion that we used. Although we are no longer financially responsible could it still effect us or his job in anyway? Want to make sure we understand all the posibilities of what could happen.

    1. Hi Samantha:

      I’m going to forward this to one of our VA Home Loan Experts to go over this with you. They’ll be reaching out soon.

      Thanks,
      Kevin Graham

  3. I just got a VA loan of $144,000 for our house. Since WE pay no taxes any more either Fed.. or State the interest deduction we do not need or use can we let our son assume our VA loan so that he can use the deduction We live off of our SS and my 100% VA disability. He makes around $65,000 a year. Our rate is 2.75% and our monthly payment with Tax and Insurance is $875. His only other bill is his car payment of $525 a month

    1. Hey Rodney:

      It’s difficult to answer assumption questions here because these qualifications rely so heavily on a person’s unique financial profile. However, I’m going to get your comment in front of our Home Loan Experts you may be able to give you more information and potential next steps.

      Thanks,
      Kevin Graham

  4. Hello,
    I have a VA loan now and have had It for over 7 years. I am selling my home to a retired veteran and he would like to assume the mortgage.
    He was going to assume the mortgage for what is owed on the house through the VA and give me a check for the differance as the home has some equity and is worth more then I owe.
    I was told that this was not allowed, that I have to sell the house for the amount owed to the VA and was not allowed to get any more money for it.
    This does not sound right to me. Why would I sell my home for less than it is worth?
    Can you please shed some light on this for me?
    Thank you

    I was told it can be done, but

    1. Hi Darlene:

      When someone assumes a property, they’re assuming the current terms of the mortgage. I’m going to pass this comment along to a Home Loan Expert to help answer your question regarding a possible extra payment.

      Thanks,
      Kevin Graham

      1. Would you please forward me the reply Darlene received. My husband and I are looking for a home. He is a disabled vet who qualifies for a VA home loan. A real estate agent told us that just because the posting says the loan is VA assumable, the seller might ask for a large down payment (cash) to recover what they have already paid. Is this true, and how do you know?
        Thank you

  5. My husband and I are getting divorced. He is the only one on the mortgage and the deed. Is it possible for me to assume the loan although it’s a VA loan and I’m not a veteran? I would like to keep the house.

    1. Hi Nicole:

      it is possible, assuming you meet the VA’s loan requirements for being able to pay it off. You do have to pay the VA funding fee. Your husband would also lose his VA entitlement in this case. I’m not sure if that’s something the two of you have talked about, but if he lost the entitlement, he wouldn’t be able to get another VA loan. I hope this is helpful in laying out some of the issues.

      Thanks,
      Kevin Graham

  6. I have a VA loan on two houses the balance is 145k and 165k. I am PCSing again and need to buy another house can I get a third VA loan for 110k?

    1. Hi Jeremy:

      Good luck with your station change. I’m going to send your question to one of our Home Loan Experts to see what your options might be. They’ll be reaching out.

  7. How long does the vet have to occupy a property before the loan can be assumed? Also does the loan have to be behind or can the vet let someone assume the mortgage for any reason?

    1. Hi Cheri:

      The veteran doesn’t have to be behind and, in fact, they should be current on their payments, but I’m going to pass your question along to one of our Home Loan Experts who can give you more information on your question.

      Thanks,
      Kevin Graham

  8. If the new VA buyer of a property is assuming a VA loan, does that buyer also have to agree to live in the home? If the new VA buyer is buying the property for an investment, is the seller released from liability and eligibility assuming the new VA buyer qualifies?

    Randy

    1. Thanks for your comment, Randy. I’m going to pass this one on to one of our home loan experts. They can look into your situation and send you an email. Have a nice Tuesday!

  9. I have a question. I have really terrible credit due to a bad divorce which left the two of us filing bankruptcy. I’ve also had a car repossessed. I am trying to get my life back on track & recently found the perfect home for sale or rent. I had already given my deposit when the owner informed me that he’s had someone contact him interested in purchasing the home. I am not in the position to purchase due to my terrible credit. But the owner said the loan is VA assumable & my Dad was in the military & could possibly assume the morgage. But, he & my mom are planning on building a home in the next few years and are worried of they assumed this morgage their income ratio thing would not allow them to morgage the home they’re planning on building. So my question is, if he were to assume the loan would it show him as the responsibile morgage holder, or would the prior owner?

    1. Thanks for your comment, Jennifer. Since your situation has so many factors, I’m going to reach out to a home loan expert. They’ll dive in to the specifics of your situation and send you an email. In the meantime, take a look at this article about rebuilding credit!

  10. My dad & mom obtained a VA loan in 2004, jointly. Dad has since passed in 2007 and now my mother’s health has taken a drastic turn. Mom wants to will the house to my sister, who was never on the deed or the loan. Will this require applying for a new mortgage? Do we need to complete Probate before addressing this issue. Thank you for your help as we are trying to be proactive and not reactive during this stressful time. Many thanks for your help.

    1. We’re so sorry to hear about your mother, Deby. I’m going to have one of our home loan experts reach out to you directly with an email. They’ll get a few more details from you and give you the best possible answer. Everyone’s situation is different, but we will do our best to point you and your family in the right direction. Take care.

  11. I’m the spouse of an Active Duty Service member and we’re looking into buying a house. We’ve prequalified for a conventional mortgage loan, but am looking into the advantages of a VA mortgage loan (like no downpayment, for example). I’d like more information about how a VA loan can be assumed by a non-VA civilian (should we choose to sell the house after a change of station) and whether this will make qualification harder on the next property loan, VA or otherwise. Thanks.

  12. We have a VA loan that our kids want to assume. I know there is a .5% funding fee, but what else are they allowed to charge. It seems the bank is trying to add fees that we were never told about til now. We don’t know where or who to contact to find out, what the real deal should be. Thanks

    1. Good morning, George! That’s a big question, and a lot of it is going to depend on your personal situation. And since the devil’s in the details, I’m going to have a home loan expert send you an email with some questions. We’ll get to the bottom of this together. Have a good one!

  13. My mother has her house on a VA loan she is moving and my name is on the deed. Ive been paying the mortgage for 3 yrs now. How can i assume it without changing whats owed on it and how much the payments are?

  14. It would be nice if you answered the questions posted here. Everyone was a referral to someone else. I have the same question as another post. If I have a VA loan, Can someone who is not a veteran assume my loan

  15. My husband and I are separating. I have the VA loan solely in my name, but he wants to assume the mortgage and keep the house. Both of our names are on the deed. If he can assume the mortgage and I can take my name off the deed, what else do I need to do to ensure I am no longer liable with the government?

    1. Hi Laura! I’ve passed your question on to our home loan experts who will reach out with more information.

  16. I am a veteran with a VA loan on a home build in 2012. My wife and I are divorcing amicably and I want to buy her out of the home. Can I essentially assume my own loan just to remove her? I did qualify for the loan without her income. Also, what may be the best route to pay her 50% of the equity on the house; can I borrow against the loan or should I take out a separate loan to repay her?

    1. Hi Blain! I’ve passed your question on to our mortgage experts who can advise you more specifically for your situation.

  17. I am a veteran who purchased a home on my VA eligibility. I want to sell my home under an assumption to a non-veteran. I am getting mixed responses to my inquiries whether or not I am allowed to. My mortgage is through Wells Fargo, my relator has received a different answer than I have. Also, am I able to receive a new VA loan for my new house after an assumption, if I receive a release of liability?

    1. Hi Lori! He would be able to assume your fathers VA loan and your father’s entitlement would still be tied to the property until the loan was refinanced or paid in full.

  18. The male veteran passed away, both husband and wife’s name are on the Trust deed.There was no estate. nothing filed, other than Death Certificate recorded.

    Some one is willing to assume my loan now I am the surviving spouse. The party wishing to assume loan have been approved.
    Now the Mortgage holder (Wells Fargo) say there has to be a probate document to go ahead.

    There was no probate. There was no estate, nothing. t recourse do I have? Can you direct me to a source that can help me. I am going to loose the house.

    1. Hi Dorothea! I’ve passed this on to our mortgage experts who will reach out and dig into this further for you.

  19. Can the surviving adult children of a deceased veteran with a VA loan assume the loan? Is their laws that protect us from losing our mothers, (deceased), home?

  20. To the previous commenter, all FHA, VA, and USDA loans are assumable. As rates rise off historical lows there is more value in an assumable mortgage than many people realize. For more information there are some good sites to check out:

    Wikipedia – Mortgage Assumption

    HUD Handbook – Chapter 7

    Zumption – Assumption FAQ and Listings

  21. I had an original post that did not go through. I was saying how this article was helpful in determining what properties to look at and is and how existing VA loans could be assumed. That now I needed to look for articles on other lone programs and if they could be assumed.

    Thanks
    Norm

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