Assumable mortgage

A loan that a buyer can take over from the seller, inheriting the existing rate and balance.

Most conventional mortgages are NOT assumable. The big exceptions: VA loans (assumable by anyone if approved by the VA, regardless of military status) and FHA loans (assumable with lender approval and qualification). In a high-rate environment, assuming a 3% mortgage instead of getting a new 7% one can be worth 20-40% of the property's value in implied savings. Watch the buyer-qualification process (the assuming buyer must qualify with the lender) and the buyer's required equity buy-out (you pay the seller's existing equity in cash). Underwrite carefully — assumable deals are real but rare.