What is an assumable mortgage?

An assumable mortgage lets a qualified buyer take over the seller's existing loan, including its interest rate and remaining balance, instead of originating a brand new one. FHA and VA loans are typically assumable, while most conventional loans are not. The buyer still has to qualify with the lender, and the seller usually needs cash or a second loan to cover the gap between the loan balance and the sale price. Ask early whether a specific listing's loan is actually assumable.