Could you take over a seller’s low-rate mortgage and skip today’s higher rates? If the loan is assumable, you might. In a market where interest rates are above many existing loans, an assumption can lower your payment and simplify your path to ownership. In this guide, you’ll learn what an assumable mortgage is, which loans qualify, how to verify and complete an assumption in Brevard County, and the costs and risks to watch. Let’s dive in.
What is an assumable mortgage
An assumable mortgage lets you take over a seller’s current home loan, keeping the same interest rate, remaining balance, and term. You still need approval from the loan’s servicer or agency, and you must qualify based on credit and income. If the home is worth more than the outstanding loan, you and the seller must decide how to handle the equity difference at closing.
Assumptions matter most when current mortgage rates are higher than a seller’s existing rate. By stepping into the seller’s loan, you can potentially reduce your monthly payment and overall borrowing costs. Just remember that assumption is not automatic and the seller’s liability does not end unless the lender issues a formal release in writing.
Loan types that are assumable
Assumability depends on the loan program and the language in the loan documents. Here is what typically applies.
FHA loans
FHA loans are generally assumable with servicer approval. You must meet FHA credit and income standards, complete the servicer’s assumption application, and follow any documentation requirements. The seller’s FHA benefits are not tied up the way VA entitlement can be, but formal approval is still required.
VA loans
VA loans are generally assumable, and even non-veterans may assume them with lender and VA approval. If a non-veteran assumes the loan, the seller’s VA entitlement may remain tied to that loan unless the VA approves a substitution of entitlement. Fees or administrative costs may apply, and you should confirm the process before moving forward.
USDA loans
USDA Rural Development loans may be assumable, subject to agency or servicer approval and buyer underwriting. Rules differ for guaranteed versus direct loans, so the servicer will outline the exact steps and documents you need.
Conventional loans
Most modern conventional loans are not assumable. They usually include a due-on-sale clause that requires payoff if the title transfers. Older, grandfathered loans may be different, so you should review the note and confirm with the servicer in writing.
Verify assumability: steps in Brevard County
Before you write an offer based on an assumption, verify that the specific loan can be assumed and that the servicer will approve you.
Gather documents from the seller
- Recent mortgage statement with servicer name and current balance.
- Copy of the promissory note and the recorded mortgage or deed of trust.
- Any prior assumption paperwork or relevant addenda.
Contact the loan servicer
- Request an assumption packet and written confirmation of whether the loan is assumable.
- Ask for a list of fees, underwriting criteria, and timing.
- Confirm whether the servicer will issue a written release of liability for the seller.
Review the loan documents
- Look for clear assumption language or a due-on-sale clause.
- If language is unclear, rely on the servicer’s written guidance rather than verbal statements.
- For FHA, VA, or USDA loans, confirm program-specific requirements and any funding or administrative fees.
Order title work
- A title company or closing attorney will run a title search to check for liens, subordinate loans, or encumbrances that affect the assumption.
Red flags to watch
- The servicer states the loan is not assumable.
- The note includes a due-on-sale clause and the servicer requires payoff.
- The loan is a private-label portfolio product with strict transfer limits.
The assumption process in Brevard County
Here is how the process usually works once you have basic confirmation from the servicer.
Preparation
- Seller: Notify the servicer the property is being sold. Gather the mortgage statement, payoff figure, and loan documents. Ask in writing about a release of liability.
- Buyer: Review the assumption packet and get prequalified with the servicer or a lender experienced with assumptions. Line up funds for the seller’s equity. Order inspections and any appraisal the servicer requires.
Underwriting and approval
- Submit the application, credit and income documentation, and any servicer forms.
- The servicer may require an appraisal, proof of hazard insurance, title evidence, and payoff statements for any other liens.
- Approval times vary, so build in time for questions and document updates.
Negotiating the equity
- Pay the seller the difference between the sale price and the loan balance in cash at closing.
- Arrange a seller-financed second mortgage to cover some or all of the equity.
- Adjust the sale price and structure funds so the seller receives agreed-upon equity. Any secondary financing must be disclosed to and acceptable by the servicer.
Closing logistics in Brevard County
- A local title company, closing attorney, or escrow agent coordinates the closing.
- You will sign the assumption agreement and transfer documents required by the servicer.
- The title company records the deed and any mortgage-related documents with the Brevard County Clerk of Court & Comptroller.
- Secure title insurance and update homeowner’s insurance to meet servicer requirements.
- After closing, apply for the Florida homestead exemption with the Brevard County Property Appraiser if you qualify. Homestead status does not transfer.
Post-closing protections
- Seller: Confirm in writing that the servicer issued a release of liability. Without it, you could remain liable if the buyer defaults.
- Buyer: Verify the servicer’s system shows you as the borrower of record and that payments are being credited correctly.
Costs, timeline, and who pays
Every servicer structures fees differently. Always request a written fee schedule and a closing estimate.
- Typical timeline: 30 to 60 days, sometimes longer if the servicer needs more documentation.
- Common fees: assumption or administrative fee, credit report charges, and possible program fees.
- Appraisal: often 300 to 700+ dollars if required by the servicer.
- Title and closing: title insurance, recording charges, and closing fees similar to a standard Florida closing.
- Second-mortgage costs: additional documents and recording if seller financing is used for equity.
Pros and cons you should weigh
Assumptions can be powerful, but they are not right for everyone.
Benefits for buyers
- Potentially lower interest rate than current market options.
- Lower monthly payments and total borrowing costs.
- Sometimes lower closing costs compared to a brand-new loan.
Considerations for buyers
- You must qualify with the servicer or agency.
- You may need cash or acceptable secondary financing to cover the seller’s equity.
- The remaining loan term may be shorter, which can raise the monthly principal payment.
Benefits for sellers
- A below-market rate can help your property stand out and attract more buyers.
- The right structure can help you sell faster in a higher-rate market.
Considerations for sellers
- Without a written release of liability, you could remain responsible for the loan.
- For VA loans, your entitlement may remain tied to the loan if a non-veteran assumes it and substitution of entitlement is not approved.
- Equity arrangements must be documented and recorded properly.
Local checklist for Brevard County buyers
- Get the seller’s mortgage statement, promissory note, and recorded mortgage.
- Ask the servicer for a written assumability statement and an assumption packet.
- Complete prequalification and gather income, credit, and insurance documentation.
- Decide how you will cover the seller’s equity and disclose any second mortgage.
- Order inspections and any required appraisal.
- Hire a Brevard-based title company or closing attorney for title search and closing.
- Confirm recording with the Brevard County Clerk of Court & Comptroller and secure title insurance.
- After closing, file for the homestead exemption with the Brevard County Property Appraiser if eligible.
When an assumption may not fit
An assumption might not be the best route if the servicer refuses to approve it or requires payoff due to a due-on-sale clause. It can also be challenging if the equity gap is large and you cannot secure acceptable secondary financing. If your timeline is very short and the servicer’s review is running long, a standard new mortgage could be faster.
Ready to explore an assumption in Brevard County
If you are weighing an assumption, the right partner can help you verify options, structure the equity, and coordinate with the servicer and title company. Let a hands-on, bilingual advisor make the process clear and efficient from first call to recording. Reach out to Julieta Bruni to talk through your goals and next steps.
FAQs
Can any FHA, VA, or USDA loan be assumed in Brevard County?
- Not automatically; each assumption requires servicer or agency approval and buyer underwriting, so you must verify with the servicer for that specific loan.
Do I keep the seller’s interest rate if I assume their loan?
- If the servicer approves the assumption, you step into the existing loan’s rate, term, and remaining balance, and you still must address the seller’s equity at closing.
Does a mortgage assumption remove the seller’s liability?
- Only if the servicer issues a written release of liability; do not assume the release is automatic at closing.
Can I finance the equity portion when assuming a mortgage?
- Possibly; a second mortgage or other secondary financing may be allowed if disclosed and acceptable to the servicer, and it must be properly recorded.
How do VA loan entitlement issues affect a seller in Brevard County?
- If a non-veteran assumes the VA loan and the VA does not approve a substitution of entitlement, the seller’s entitlement may remain tied to that loan until it is restored.
