Newsletter October 27, 2023

October 25, 2023


October 25, 2023

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What Is an Assumable Mortgage?

Mortgage assumption is a way for homebuyers to purchase a home and keep the mortgage rate attached to it. But assumable mortgages come with their fair share of drawbacks.


An assumable mortgage allows a homebuyer to take over the seller’s home loan – and importantly, keep the original mortgage rate. Mortgage assumption can be one way for buyers to save money while interest rates are high, and it can help sellers stand apart from the competition by offering a more affordable home loan.

If this sounds too good to be true, there is a catch: The loan amount on the assumed mortgage typically won’t cover the agreed-upon purchase price, which means the buyer may have to make up the difference in cash. Plus, only certain types of government-backed loans are assumable, and it may be difficult to find a seller who is willing to take on the additional risk of transferring their mortgage while closing the sale. All things considered, mortgage assumption is relatively uncommon, but not impossible.

Here’s what to know about assumable mortgages, including how they work and where to find one.

How Does an Assumable Mortgage Work?

Mortgage assumption is when a home seller transfers their mortgage to the person buying their home. The terms of the loan stay the same, including the mortgage rate, loan amount and monthly payment.

The process of buying a home with an assumable mortgage is fairly similar to buying any other home. It begins when the buyer enters a purchase contract with a seller – only instead of a traditional financing clause, there will be a mortgage assumption clause detailing the agreement. As part of the contract, the buyer agrees to pay the difference between the outstanding mortgage balance and the home’s purchase price, also known as the assumption gap.

Take this example: Let’s say the seller purchased the home for $400,000 three years ago, and they paid their mortgage down by $25,000. On top of that, the home appreciated by $50,000, so the sales price is now $450,000. Since the outstanding mortgage balance is $375,000, the buyer would need to cover an assumption gap of $75,000.

Additionally, mortgage assumption is subject to credit approval, much like with a traditional home loan.

“Even if the seller offers an assumable mortgage, the buyer of that property has to qualify for that mortgage,” says George Ratiu, chief economist of Keeping Current Matters, a real estate insights and analytics company. “The lender will look at credit scores, income and the full picture as if that person were applying for a loan.”

Government-backed loans are the only types of mortgages that allow for assumption in most cases, and the eligibility criteria can vary. For example, the minimum credit score needed for a standard Federal Housing Administration loan is 580, but you may need a credit score of at least 620 to qualify for an FHA loan assumption.

If the lender doesn’t approve the buyer’s application for assumption, the purchase contract could be terminated and the buyer’s earnest money deposit will be returned. For the seller, that could mean re-listing the home and finding a new buyer.

If all goes as planned and the lender approves the application, responsibility for the mortgage can transferred from the seller’s name to the buyer’s. Notwithstanding other hiccups (such as major problems found during the home inspection), the purchase agreement can be executed and the sale finalized during closing.

Which Types of Mortgages Are Assumable?

Most mortgages, including conventional conforming loans and jumbo loans, aren’t assumable. Some conventional loans have assumption clauses for exceptional circumstances, such as the death of a spouse – but that doesn’t apply to homebuyers who are seeking an assumable mortgage.

Only certain types of government-backed mortgages – FHA loans, Department of Veterans Affairs loans and rural home loans through the U.S. Department of Agriculture – have an assumption clause that can be applied toward home sales. Assumable government-backed loans make up about 18% to 20% of the mortgage market, Ratiu says. But not all sellers are willing to go through the somewhat risky process of mortgage assumption, which further limits their availability.

“Current market conditions don’t necessarily play in the favor of buyers when it comes to assumable mortgages, because for most sellers there’s enough demand,” Ratiu says. “Unless the seller is really hard-pressed, then they might use that assumable mortgage as an extra incentive.”

Since they’re fairly uncommon, one of the biggest roadblocks to getting an assumable mortgage is simply finding one. You can start by asking your real estate agent to focus on finding homes for sale with assumable mortgages, or you can search yourself on real estate platforms like Redfin, Zillow and by targeting keywords like “assumable mortgage,” “FHA loan” and “VA loan.”

But not every seller will indicate in the listing that their mortgage is assumable. If you’re not sure, just ask the listing agent.

Read: Best FHA Loans.

Benefits of Assumable Mortgages

→ Lower mortgage rates. Buyers may benefit from assuming a mortgage with a much lower interest rate than what’s currently available, especially if the loan was originated or refinanced in recent years when rates were at historic lows of around 3%. By comparison, mortgage rates have been hovering in the 6.5% to 7% range during the first half of 2023.

→ Capped closing costs. The lender won’t typically require a home appraisal, which can save time and money at closing. Plus, other closing costs are capped on some types of government-backed mortgages. For example, the VA prohibits lenders from charging more than 1% of the loan amount for origination fees.

→ Added incentive for buyers. A seller can make their home more appealing by offering the opportunity for buyers to lock in a low rate, especially when rates are high. An assumable mortgage can help set the seller’s listing apart from the rest if they’re having trouble finding a buyer.

→ Military service not required. A buyer can assume a seller’s VA loan even if they haven’t served in the military. VA loan entitlement is tied to the loan itself, not the borrower..

Drawbacks of Assumable Mortgages

→ The assumption gap. The remaining loan amount on an assumable mortgage may not cover the agreed-upon purchase price, so the buyer will be responsible for paying the difference. “In some cases, the buyer can take a second mortgage if they don’t have the cash, but otherwise there is a very significant cash contribution that must be brought upfront,” Ratiu says. Even if the buyer can find secondary financing on the open market, they’d have to go through the entire application and underwriting process, including a home appraisal – offsetting a key benefit of assuming the primary mortgage.

→ Increased risk for seller. The buyer needs to meet the lender’s credit and income requirements, which is an added risk that could delay closing (or even cause the deal to fall through) if the lender denies the buyer’s application. Plus, the seller needs to read the legal agreements carefully to ensure their name is fully removed from the mortgage during the transfer. “Sometimes, sellers can still be on the hook in case the buyer fails to make payments down the road,” Ratiu says.

→ No choice of lender. By assuming a mortgage through the seller’s lender, the buyer is unable to shop around and choose a lender based on other factors.

→ Loss of VA entitlement. Selling a home with a VA-backed mortgage assumption means sacrificing that VA loan entitlement. In other words, you won’t be able to borrow another VA loan until the assumed loan is paid off.

Is an Assumable Mortgage Right for You?

Mortgage assumption is a legitimate way to buy a home at a low rate, especially if you have sufficient cash reserves to cover the assumption gap. But keep in mind that finding an assumable mortgage should be a secondary concern. After all, you’re buying the house itself, not the loan associated with it.

“Focus on the house that’s going to be your home,” says Ratiu. “As a buyer, instead of worrying about finding an assumable mortgage, understand that what you’re really finding is a home.”

Disclaimer: The information provided in this newsletter is intended for general informational purposes only and should not be considered as professional financial advice. While we strive to ensure the accuracy and timeliness of the content, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information, products, services, or related graphics contained in this newsletter for any purpose. Any reliance you place on such information is strictly at your own risk. We recommend consulting with a qualified professional before making any financial or real estate decisions. We disclaim any liability for any loss or damage arising from the use of this newsletter or its content.


This listing has an assumable mortgage and is assumable at 5.25% interest rate.

If you are the owner of vacant land; ask a trusted Real Estate Professional to set you up on an MLS search with the criteria of your land (maybe in the community your land is located or in the city with similar property sizes). This will not only alert you if your land becomes victim to this fraud, but also keep you up to speed on what like properties are being sold for.

North Myrtle Beach Humane Society Adoptable Pet of the Week

This energetic pup is full of life and would be perfect for an active family or individual who loves to get out and explore. Violet is wide open and ready to go at all times, so she will need an owner who can keep up with her high energy level. She loves to run and play, so a home with a big backyard or access to a park would be ideal for her. Violet is also a smart dog who will benefit from regular training and mental stimulation. With a little patience and consistency, she will thrive and become a well-behaved companion.

Enrichment is key for Violet, and she would do best with an owner who is willing to provide her with plenty of attention and playtime. She loves toys, especially ones that challenge her and keep her entertained. Violet is a social dog who enjoys the company of humans, so she would do well in a home with an owner who can give her plenty of socialization.

If you’re looking for a fun-loving, active dog who will keep you on your toes, Violet is the perfect fit! She’ll keep you entertained and bring lots of joy and laughter to your life.  To meet Violet, please call 843-249-4948 to schedule an appointment, or you can submit an application HERE.

Halloween promises to be the spookiest spectacle of the year. As the streets fill with pint-sized Batmans, Jokers, and Wonder Women, there’s one thing they’re all sure to appreciate – more square footage for their candy stash!

Don’t settle for cramped spaces this Halloween. Let me help you find the home that suits your ghoulishly grand needs. Contact me today and let’s make this Halloween a truly hauntingly happy one!


8014 N. Kings Hwy.

Myrtle Beach, SC 29572

Hip, nautical set-up for local seafood paired with wine & spirits plus happy hour & Sunday brunch.



October 28th 

12:00PM to 4:00PM

Whether you have human kids or furry kids, BooFest! is the place to be on Saturday, October 28th in North Myrtle Beach for activities, costume contests and more!

Activities include the children’s and pet costume contests as well as character appearances, kids dance party and more!


1102 Hwy 17 S

North Myrtle Beach, SC 29582

Cole’s Jewelers in North Myrtle Beach comes highly recommended for all your jewelry repair needs. Whether you need a gold chain repaired, a ring resized, or a missing stone replaced, Cole’s Jewelers is the place to go. They are known for their reliable, reasonable, and trustworthy service.

Sip happens, especially in soup season!



  1. Combine base ingredients. Combine vegetable stock, wild rice, mushrooms, garlic, carrots, celery, sweet potato, onion, bay leaf and Old Bay seasoning in the bowl of an Instant Pot pressure cooker. Stir briefly to combine.
  2. Pressure cook. Cover and cook on manual (high pressure) for 25 minutes. Let the Instant Pot rest and naturally release the pressure for 10 minutes. Then carefully open the vent and quick release the remaining pressure. Remove lid and discard the bay leaf.
  3. Add final ingredients. Add the coconut milk and kale to the soup, and stir gently until combined. Taste and season with salt and pepper (plus any extra Old Bay seasoning, if you would like) as needed.
  4. Serve. Serve warm and enjoy!


  1. Sauté the veggies. Heat (an extra) 1 tablespoon butter or olive oil in a large stockpot over medium-high heat. Add onion and sauté for 5 minutes, stirring occasionally, until soft and translucent. Stir in the garlic and cook for an additional 1-2 minutes, stirring occasionally, until fragrant.
  2. Add base ingredients. Add in the vegetable stock, wild rice, mushrooms, carrots, celery, sweet potato, bay leaf and Old Bay seasoning. Stir to combine.
  3. Simmer. Continue cooking until the soup reaches a simmer. Then reduce heat to medium-low, cover and simmer for 30 to 40 minutes until the rice is tender, stirring occasionally.
  4. Add final ingredients. Add the coconut milk and kale to the soup, and stir gently until combined. Taste and season with salt and pepper (plus any extra Old Bay seasoning, if you would like) as needed.
  5. Serve. Serve warm and enjoy!


  • 6 cups vegetable stock (or chicken stock)
  • 1 cup uncooked wild rice*
  • 8 ounces baby bella mushrooms, sliced
  • 4 cloves garlic, minced
  • 2 medium carrots, diced
  • 2 ribs celery, diced
  • 1 large (about 1 pound) sweet potato, peeled and diced
  • 1 small white onion, peeled and diced
  • 1 bay leaf
  • 1 1/2 tablespoon Old Bay seasoning
  • 1 (14-ounce) can unsweetened coconut milk (or see cream sauce option below*)
  • 2 large handfuls of kale, roughly chopped with thick stems removed
  • fine sea salt and freshly-cracked black pepper

Recipe Variations

  • Add chicken: Use pre-cooked diced or shredded chicken, or poach a raw chicken breast while the rice cooks, then shred and add it before serving.
  • Change seasoning: Try Cajun, Italian, or herbs de Provence instead of Old Bay for a different flavor profile.
  • Adjust spiciness: Start with 2 teaspoons of Old Bay for a milder version, adding more to taste later if desired.
  • Go gluten-free: For the dairy version, thicken the broth with a cornstarch slurry (equal parts cold water and cornstarch) to reach desired consistency.


Not sure what to do with the pumpkin seeds after you carve your jack-o-lantern this year? Try this recipe. Roasting pumpkin seeds is a favorite memory of mine from childhood and produces a healthy snack the entire family can enjoy.


  • Seeds from 2 large pumpkins
  • ½ teaspoon Lawry’s Seasoned Salt
  • ½ tablespoon olive oil
  • Dash of salt


  1. Preheat oven to 350 degrees F.
  2. Scrape out and remove seeds from your two pumpkins. Wash and clean your seeds from your pumpkin, making sure you remove any unwanted pumpkin rinds or deformed seeds. Wash in a colander and once again remove any unwanted items.
  3. Soak the clean seeds in a bowl full of water for 1/2 hour on the kitchen counter or overnight in the refrigerator. Drain the seeds, discarding the water.
  4. Fill a pot with water and a dash of salt (enough water so that it will cover the seeds). Bring the water to a boil. Place seeds into the boiling water and boil gently for about 10 minutes.
  5. Turn off the heat and drain the seeds and place back into your empty bowl. Toss seeds with olive oil. Lay out seeds in a thin layer onto a cookie sheet. Sprinkle with Lawry’s Seasoned Salt. Place in oven and move and turn the seeds over about every 10 minutes, making sure they are not burning. Seeds are done after about 40 minutes or when they become firmer and are no longer soft. You do not want dark spots on your seeds, you want them to be a darker yellow.
  6. Season with additional salt if desired. Remove from oven and allow to cool. Place into a clean mason jar or another food-safe storage container. Enjoy!

Kristen Lundy



M: 843-344-5621

O: 843-448-7169

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