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Assuming someone else’s mortgage can be a great way to save money on interest when mortgage rates are above 6%. The mortgage assumption process involves the buyer taking over the seller’s existing mortgage, keeping the same interest rate and terms. This process is usually applicable for government-backed loans. An assumable mortgage can result in significant savings on interest, but it comes with a complicated approval process and requires a large cash payment to compensate for the seller’s equity in the home. There are also additional costs, such as closing costs, to consider when assuming a mortgage. Despite the drawbacks, assumable mortgages can be an attractive option for home buyers in certain situations, and it can help sellers attract potential buyers. Most government-backed loans are assumable, while conventional loans are usually not. Considerations such as the type of loan, approval process, and compensation for the seller need to be carefully weighed when considering an assumable mortgage.



Original: What Is an Assumable Mortgage?