What if you could buy a California home and inherit the seller’s 3% mortgage rate instead of taking a new loan at 7%? With an assumable mortgage, that is exactly what happens — and in today’s rate environment, it can save you hundreds of thousands of dollars over the life of the loan.
📞 Call DiVita Home Finance at (800) 239-1103 to find out if assumable mortgage financing is available on the home you are considering.
What Is an Assumable Mortgage?
An assumable mortgage allows a home buyer to take over the seller’s existing loan — including its original interest rate, remaining balance, and remaining term. Instead of taking out a new mortgage at today’s rates, the buyer steps into the seller’s loan as if they were always the borrower.
Not all mortgages are assumable. In California, the following loan types can be assumed:
- FHA loans — assumable by any qualified buyer
- VA loans — assumable by any qualified buyer, including civilians
- USDA loans — assumable with lender approval
Conventional loans (Fannie Mae/Freddie Mac) are generally NOT assumable. They contain “due-on-sale” clauses that require the loan to be paid off when the home is sold.
How Much Can You Save with an Assumable Mortgage?
| New Loan at 7.0% | Assumed Loan at 3.0% | Monthly Savings | |
|---|---|---|---|
| Loan amount: $500,000 | $3,327/mo | $2,108/mo | $1,219/mo |
| Loan amount: $700,000 | $4,657/mo | $2,951/mo | $1,706/mo |
| Loan amount: $900,000 | $5,987/mo | $3,794/mo | $2,193/mo |
Over 10 years, assuming a $700,000 loan at 3% instead of borrowing at 7% saves over $204,000 in interest. This is arguably the most powerful financial benefit available to California homebuyers right now — if you can find the right property.
How the Process Works
Assuming a mortgage in California involves several steps:
- Identify an assumable property — the listing must have an existing FHA or VA loan. Some MLS listings note this; others require verification.
- Qualify with the original lender — you must meet the lender’s income, credit, and DTI requirements to assume the loan. The original lender approves the assumption.
- Cover the equity gap — the assumed loan balance is usually less than the purchase price. You must pay the difference in cash or with a second mortgage. DiVita Home Finance can help structure the financing for the equity gap.
- Close the assumption — the process takes 45 to 90 days on average, longer than a standard purchase.
Can a Civilian Assume a VA Loan?
Yes. Despite what many people believe, civilians (non-veterans) can assume a VA loan. You do not need to be a veteran to take over the seller’s VA mortgage. However, if a civilian assumes a VA loan, the veteran seller’s VA entitlement remains tied to the loan — the veteran cannot use that entitlement for another VA loan until the assumption is paid off, unless the assuming buyer is also a veteran who substitutes their entitlement.
The Equity Gap Problem — And How to Solve It
This is the most common barrier to assumption deals. If the seller has a $350,000 remaining balance on a home listed at $800,000, the buyer must cover the $450,000 gap at closing. Some buyers use cash. Others need a second mortgage — which DiVita Home Finance can often arrange alongside the assumption.
Frequently Asked Questions
Are all FHA loans assumable?
Yes, all FHA loans originated after December 1, 1986 are assumable by any creditworthy buyer who qualifies with the lender. The buyer must meet the lender’s standard income and credit requirements.
How long does a loan assumption take?
45 to 90 days is typical, compared to 21 to 30 days for a standard purchase. The lender must process the assumption application, verify the new borrower’s qualifications, and update the loan records. Plan accordingly when writing your offer.
Can I assume a mortgage and do a buydown?
An assumed loan already has a fixed rate from the original note — there is no reason to buy it down further since you are already getting a below-market rate. The assumption is itself the “buydown.”
How do I find homes with assumable mortgages in California?
Search MLS listings that note FHA or VA financing. Websites like Roam and AssumeList specifically filter for assumable listings. Your real estate agent can also search for sellers with FHA/VA loans originated between 2019 and 2022, when rates were at historic lows.
📞 Call DiVita Home Finance at (800) 239-1103 to discuss assumable mortgage strategy for your California home purchase — including how to structure financing for the equity gap.
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
