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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 husband of 25 years recently passed away in July 2016 I have contacted out mortgage company about assuming our VA loan and the mortgage company told me that they do not do assumable loans I was not on the original mortgage but since my husband has passed suddenly I need to assume the loan I am currently on disability and I would like to know what I should do to assume the VA loan and what the qualification are for doing so. If you can tell me what survivorship benefits widows have I would greatly appreciate it I don’t know which way to turn. Thanks for your help.

    1. Hi Teresa:

      In your case, as a surviving spouse you have the ability to assume the loan under Garn-St. Germain, a federal law. You can find more information here. I would bring that up with your lender.I’m sorry to hear about your husband’s passing. Hope this helps!

      Thanks,
      Kevin Graham

  2. Hello! My husband (active duty) and I (civilian) have a VA loan. My husband received orders to PCS (military move) and we are looking at loan assumption as a possibility. If we decide to do a VA loan assumption with another active duty family, will we be able to apply for another VA loan in the future? Does the mortgage have to be paid in full before we can do that? Thanks for your help!

    1. Hi Ashley:

      If another veteran assumes the loan, you’d be able to get another VA loan right away because your full entitlement is restored when it’s transferred to the other servicemember. It doesn’t have to be paid off.

      Thanks,
      Kevin Graham

  3. Hi,
    My ex-spouse is in the process of refinancing our house thru the VA. He would like for me and his children to assume the loan and live in the house in the event of his death. Would we need to qualify on our own or could we assume the va loan without qualifying?
    Thank you
    joann b

    1. Hi Joann:

      In the event of your husband’s death, you wouldn’t have to qualify. You could just assume the loan and keep making the payments.

      Thanks,
      Kevin Graham

  4. My HOA foreclosed for delinquent dues and assessments and acquired the unit at auction. I am now in my 90 day redemption period. The existing first and only loan is the original VA loan acquired at purchase. If the VA loan is only assumable by a qualified veteran, how then can the HOA take title subject to the existing VA loan at the end of the redemption period? Their reserves are only 4% funded and do not have $145,000 to pay off the VA loan, nor would it be prudent because the property value is “underwater”. What happens to the procedure at the end of the redemption period? The existing lender as yet has not elected to record a NOD and set a sale date. Does the HOA still have the right to evict me at the end of the redemption period if it cannot take title subject to the existing VA loan? Your input would be appreciated. I live in California.

    Thanks

    1. Hi Michael:

      I would consult a lawyer to look into some property issues as far as your rights in the local area as far as foreclosure. I do want to clear up a couple of misconceptions.

      First, anyone could assume a VA loan if you sold the property. The only stipulation is that if you sell to a nonveteran, you would lose the right to use a VA loan in the future.

      Second, if they bought it at auction, they aren’t using your VA loan. They’ve acquired their own financing. As far as your other questions and your legal rights, it would be best for you to consult an attorney. Good luck!

      Thanks,
      Kevin Graham

  5. I want to let my daughter buy my house and assume my va loan. I am a disabled veteran. Will I have closing costs at closing? Can I request additional from her through th va loan? I guess what I mean is can she assume it for more than what is owed by me? The house appraised at 26,000 more than I bought it for. What if the interest rate has gone down since I purchased the house, can she get the lower interest rate?

    1. Hi Sharon:

      Thank you for your service!

      If your daughter assumes your VA loan, she has to do so under the terms of the original loan. She can’t owe any more than what you bought it for. After she assumes the loan, she could choose to refinance at a lower rate at that point.

      Thanks,
      Kevin Graham

  6. If i get a va home loan and die down the road, can my children assume that loan, im divorced and id like to know before i buy a house under a va loan

  7. Looking into my mother’s taxes, I saw that the owner is listed as the VA admin. How is thisossible if she is not a veteran and what happens to the home if God forbid, she passes away? Please advise and thanks in advance!

    1. Hi Renee:

      I would be interested to know where you saw that. The VA Administration can’t be listed as the owner on the title. It is possible she could have a VA loan if she’s the surviving spouse of a veteran. However, even in the case where she’s paying off the mortgage, the VA doesn’t own the house. They just invest in the loan itself and insure it when it is sold to other investors.

      Thanks,
      Kevin Graham

  8. If a house has a VA mortgage on it and there is a beneficiary deed, can the beneficiary assume the loan without having to qualify?

    1. Hi Kendra:

      Whether or not you have to qualify may depend on the relationship you have to the person that gave you the property. I can tell you that if you have the ability to make the payments, the lender can’t really withhold their consent without good reason.

      Thanks,
      Kevin Graham

  9. I am purchasing a new home using my VA benefits (I am a veteran), I want to add a friend (a civilian) onto the deed after closing, by doing a “quick claim deed” can I do this? No, this person is not a spouse, fiancée, family member or significant other) However they have contributed to the purchase of the home and will be living and contributing to the home and all bills. We are business partners and found it economically better and a cost savings by living together. We both have A+ credit scores and no outstanding debt. Is their some clause that prevents me from adding this person to the deed after closing? If I am not able to add to the deed, am I able to WILL the house to them? or can this person assume the loan? they have excellent credit and no outstanding debt.

    1. I know you can will the house. The assumption wouldn’t be a problem because you wouldn’t have a use for your VA entitlement after you pass on. In terms of adding that person to the deed, it might be better to ask someone at the VA as this isn’t specifically related to the mortgage.

      Thanks,
      Kevin Graham

  10. My son is a veteran as am I and he is already preapproved for a VA loan. His mother passed away years ago while he served and moved back home after his discharge. I’ve remarried since and have moved, while he and his family live in my old home. He rents the property now, but would like to assume the loan. What is the process? Do I just contact my lender and see if they will approve the loan assumption…and if they do, then just contact the VA to substitute his entitlement for mine?

    Mike

    1. Hi Mike:

      Every lender’s assumption process is slightly different. The next step that I recommend is talking your lender and going over what they require. They’ll be able to walk you through the process.

      Thanks,
      Kevin Graham

  11. My cousin (a Veteran) is going to be attempting to assume my VA home loan and before he can he has agreed to pay off a second mortgage for some new windows. What documentation can I produce for him so he can borrow from his 401K to pay off the balance of the second mortgage and what document do I need to produce for him to prove he is going to attempt to assume the mortgage on the house.

    1. Hello, David. You can reach out to a home loan expert here! They’ll look through your specific situation and point you and your cousin in the right direction. Thanks, and best of luck to you!

  12. If my father (Veteran) passes away can I (civilian) assume his VA loan? Exactly the the way the loan is set up now? (ie; no mortgage ins, interest rate) He has a much better credit rating than I do and I wouldn’t be able to refinance on my own. Can I move in and start making the monthly payments on the existing VA loan? Thank you.

    1. Hi Kathleen:

      If you were able to assume the loan, it would be under the same terms he has now. However, you would have to qualify with your own credit and DTI in order to assume the loan, so you may not get the result you want. I’m going to have someone reach out to you to go over this.

      Thanks,
      Kevin

  13. My father passed away and has a VA loan on his home in Florida. I am the only child and the executor of his estate. I would like to keep the home and use it as a 2nd home rather than sell it as I come to Florida at least twice a year. Am I able to assume his VA mortgage for second home use as long as I qualify credit/income wise?

    1. Hi Lisa:

      I’m not sure how this works in cases of assumption, so I’m going to forward this to one of our Home Loan Experts that can give you more information.

      Thanks,
      Kevin Graham

  14. If my ex wife assumes my VA loan am I liable for the loan? I need to purchase a home and don’t know if the va loan that my ex assumes will still count against my credit. The way I read it I would be released from the loan liability but my VA benefit would still be attached to the house until paid off?

    1. Hi Zach:

      As soon as the assumption is complete, your ex-wife would be solely liable for the property. However, you won’t be able to get a new VA loan even if the house is paid off because VA rules only provide for restoration of the entitlement if another veteran assumes the loan. There’s more information on this page under “Restoration of Entitlement.” Hope this helps!

  15. My ex-husband (service member) and I (civilian) have a VA Mortgage in both of our names on a home. We have a great interest rate and have decided that I would keep the house and refinance. I read about some VA loans being assumable and wondered if its possible to have my father (retired air force vet) assume the mortgage with me to basically just replace my ex on the VA Mortgage so it would be in mine and my father’s name using his VA benefit to release my ex-husband so he can purchase a house on his own using his VA benefit and not being obligated to the current house mortgage? Who makes the determination if a VA loan is assumable, does the bank who our mortgage is currently through have any say? Thanks for any assistance you can give me!

    1. Hi Brandy:

      it’s ultimately up to your bank that currently holds the mortgage to answer these questions. What you want to do makes total sense, but banks have different policies regarding assumption and what’s necessary in order to qualify you and your father so that your ex-husband can keep his VA entitlement. I would start with your lender and go from there. Hope this helps!

      Thanks,
      Kevin Graham

  16. I have almost completed the assumption process with my lender (I’ve requested to assume my VA loan to have my ex-spouse removed from liability). I received a Closing Estimate at the beginning, but now they want me to sign a new estimate disclosure with an additional fee: “VA Pass Thru Fee” ($528). I can’t find any info on what this is for…it is legit? It’s on top of a $900 assumption fee from the lender.

    1. Hi Ashley:

      I know lenders may have different names for the fees that they charge, but I would be happy to have someone reach out and help you look into this. They’ll be in contact.

      Thanks,
      Kevin Graham

  17. My wife(civilian) and I (Veteran) are getting a divorce. She wants me to keep the house but doesn’t want to stay on the mortgage. Can I do a loan assumption on my current mortgage to get the house put under my name only? If so, would my interest rate change and how much does it cost?

    Thank you

    1. Hi Joshua:

      We can help you look into your options to refinance and have your wife removed from the loan. I can’t really say what the rate would be or how much it would cost because every situation is different and it’s very unique to the individual situation. That said, I’m going to have someone reach out to you about this.

      Thanks,
      Kevin Graham

  18. Our VA loan is in my husband’s name. We are in the middle of a divorce. The realtor said our property value is about 30K less than what we owe on it. Can I (civilian) assume that VA loan with my only current source of income being spousal support and child support? If it is possible, would he be able to purchase a another home using VA?

    1. Hi Jackie:

      I’m going to have someone reach out to you about this. Ultimately, whether you could qualify would depend on how much the support was and whether you could afford the mortgage and any other debts you have to pay. If you were to assume the mortgage, your husband couldn’t get another loan through the VA.

      Thanks,
      Kevin Graham

  19. My dad just bought raw land (gaming, camping)through a VA loan. Does the VA prohibit a person from building on the property?…and also , i s the VA allowed to foreclose on the property if my dad passes away?…How may we find out if this is an assumable loan….Thank you.

    1. Hi Lady:

      So I’m going to take this one at a time.

      We don’t do new construction loans, so I’m not equipped to answer that question. If he wills the property to someone, the lender will work with them so they can take over the payment. VA loans are assumable. If the property is transferred to a nonveteran, your father loses his VA entitlement to get another home loan. It also depends on the policies of the lender as to whether they will approve it.

      Kevin

    1. Hi Hugh:

      If someone assumes your loan, you will no longer be responsible for any payments or anything surrounding it once the assumption is complete.

      Thanks,
      Kevin Graham

  20. We are having another VA member assume are loan and i was wondering if when they assume it, if we lose our amount they assumed or will that amount go back to our Original VA allowed amount?

    1. Hi Sara:

      Great question. If another VA entitled borrower assumes your loan, it’s then transferred to their entitlement. Your full entitlement amount is restored. Let us know if you have any other questions.

      Thanks,
      Kevin Graham

    1. Hi David:

      Yes, the VA allows you to assume the loan in the event of your father’s passing. Please let us know if you have any other questions.

      Thanks,
      Kevin Graham

  21. I am a retired military/veteran and bought my house in 2014 through VA loan. I am currently selling my house to purchase another and an offer was made but the buyer will be using FHA to purchase the house. Once the buyer is approved to purchased my house through FHA, will I be eligible to purchase another house using VA loan?

    1. Hi Jaime:

      I’m not the most familiar with the way the VA entitlement works, so I’m going to get your question to one of our Home Loan Experts. They’ll be able to give you more information.

      Thanks,
      Kevin Graham

  22. My dad bought a house through the va March of 2016. I am living with them(daughter) and he wants me to have the house when he passes. How do we keep the house with the payments? I sold my business in Maryland to move here to help, so I do not have income coming in except the money I have from the business. My mom is on the deed but not the loan. If something happens to my dad and or mother will I be one homeless?

    1. Hi Jill:

      I’m going to have someone reach out to you to give the best possible advice for what happens when you inherit the house.

      Thanks,
      Kevin Graham

  23. I am in looking at assuming a VA loan. I am a veteran and the loan is serviced by quickenloans. What is the fastest way to get into contact with your company to speak with someone on the phone outside of the east coast business hours? I have many questions and a prompt response would be fantastic.

    1. Hi John:

      I’m going to have someone reach out to you today regarding the best time to reach you. We should be able to accommodate time zone differences. Look for an email from our Client Relations team. Thanks for reaching out!

      Kevin Graham

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