"YOUR GUIDE TO ASSUMING THIS VA LOAN AND KEEPING THE LOW RATE."

Infographics - "YOUR GUIDE TO ASSUMING THIS VA LOAN AND KEEPING THE LOW RATE."

Why this home is different:

This home has an existing VA loan with a rate well below today's market. Instead of getting a new loan at around 6.8 percent, you can apply to take over the seller's loan and keep their rate, balance, and remaining term. Today new VA rates are around 5.875 to 5.99 percent. Most assumable loans we see right now are 2.5 to 4 percent. That difference can save you hundreds per month.

How a VA assumption works:

All VA loans are assumable by law. You must fully qualify with the current loan servicer, just like a new loan. That means credit check, income verification, and residual income review. Both veterans and civilian buyers can assume. If you are a veteran, you may be able to substitute your VA entitlement so the seller gets theirs back. That is a big help for military sellers during PCS season.

What it costs:

You will pay a 0.5 percent VA funding fee, a servicer processing fee of up to 300 dollars plus local adjustments, and normal closing costs. There is no VA mortgage insurance.

The equity gap explained:
This is the part most buyers miss. If the home price is higher than the current loan balance, you need to cover the difference. For example, if the home is 500,000 and the assumable balance is 300,000 at 3 percent, you need 200,000 for the gap. That can be cash, a second loan, or other approved financing. Even with a second loan, your blended monthly payment is often much lower than a brand new loan at today's rates.

This is the part most buyers miss. If the home price is higher than the current loan balance, you need to cover the difference. For example, if the home is 500,000 and the assumable balance is 300,000 at 3 percent, you need 200,000 for the gap. That can be cash, a second loan, or other approved financing. Even with a second loan, your blended monthly payment is often much lower than a brand new loan at today's rates.

How long it takes and the 45 day rule:

VA Circular 26-23-27 now requires servicers with automatic authority to issue a decision within 45 calendar days of a complete package. Servicers without automatic authority must forward the file to VA within 35 days. Plan for 45 to 75 days total. Files that are submitted complete close fastest.

Want to see your exact savings on this home?

Text or email me the address and I will run a side by side payment showing the assumed rate versus a new loan at today's rates so you can see the monthly and yearly savings before you write an offer.

Julie Robertson | Colorado Springs VA Realtor
VA Assumable and PCS Specialist