| Scenario 1: Assume + New 30-Yr Loan | Scenario 2: Assume + Cash | Scenario 3: New 30-Yr Loan | |
|---|---|---|---|
| Total Loan Cost (P&I) | $0.00 | $0.00 | $0.00 |
| Total Savings vs. New Loan | $0.00 | $0.00 | N/A |
| Monthly P&I Savings (Phase 1) | $0.00 | $0.00 | N/A |
| --- Est. Total Monthly Payment (PITI + HOA) --- | |||
| Loan Amount(s) | |||
| Interest Rate(s) / APR | 0% & 0% | 0% | 0% |
| Months 1 - 312 |
$0.00 (P&I: $0.00) |
$0.00 (P&I: $0.00) |
$0.00 (P&I: $0.00) |
| Months 313 - 360 |
$0.00 (P&I: $0.00) |
$0.00 (P&I: $0.00) |
$0.00 (P&I: $0.00) |
| --- Estimated Cash to Close --- | |||
| Down Payment | $0.00 | N/A | $0.00 |
| Cash for Equity Gap | N/A | $0.00 | N/A |
| Total Est. Cash | $0.00 | $0.00 | $0.00 |
An assumable loan is a mortgage that a homebuyer can take over from the seller, keeping the original loan's interest rate, remaining balance, and repayment schedule. This is a powerful advantage when current interest rates are much higher than the seller's rate.
No. Most conventional loans are not assumable. The most common types of assumable loans are those backed by the government, specifically FHA loans and VA loans. These loans do not have "due-on-sale" clauses, which is what allows them to be transferred to a new, qualified buyer.
The equity gap (or "assumption gap") is the difference between the home's sales price and the remaining balance on the seller's assumable loan. As the buyer, you must cover this gap. For example, if you buy a home for $650,000 and assume a loan with a $400,000 balance, the equity gap is $250,000. This calculator helps you compare the two ways to cover that gap: either with a large cash payment (Scenario 2) or with a down payment plus a new loan (Scenario 1).
Yes. This is a critical step. You cannot just "take over" the payments. The lender (and the appropriate government agency, like the FHA or VA) must fully underwrite and approve you. You must meet all credit, income, and financial requirements, just as you would for a new loan. As a mortgage professional, I guide clients through this entire qualification process.
The calculations provided by this tool are estimates based on the information you enter and are intended solely for general informational and comparative purposes. They do not reflect all potential fees, costs, or terms, including but not limited to, homeowners insurance, property taxes, mortgage insurance, assumption fees, or discount points, which can significantly impact your actual monthly payment and loan cost.
The Annual Percentage Rate (APR) is a measure of the cost of credit, expressed as a yearly rate, that includes the interest rate plus other charges or fees. The comparison of APRs is designed to help you evaluate different loan options more accurately; however, actual rates and terms are subject to change and depend on various factors including market conditions, the specific lender's underwriting criteria, your creditworthiness, property type, and occupancy.
Assumable loans (such as FHA or VA loans) have different fee structures and requirements than conventional loans, and eligibility for assumption is not guaranteed and requires lender approval. For VA loans, a funding fee of 0.5% of the loan amount is typically required, unless you are an exempt veteran or surviving spouse, and an assumption processing fee is also charged. FHA loans have a flat maximum assumption fee.
The results from this calculator are not a promise or guarantee of loan eligibility, a specific rate, or an actual payment schedule. You should not take any action based solely on these calculations. Please consult with a qualified mortgage professional, as well as your own accounting, legal, and tax advisors, to evaluate the risks, consequences, and suitability of any real estate transaction for your personal circumstances.
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