A type of loan that may allow a buyer to “assume” an existing mortgage loan tied to the property.
An assumable mortgage is a type of loan that may allow a buyer to “assume” (or take over) an existing mortgage loan tied to the property. FHA mortgages are typically assumable if they have been formally approved by the lender, while most conventional mortgages are not. Assumable loans may be more attractive in higher interest rate environments when the seller already has a mortgage with a much lower locked rate.