VA Assumables · Oʻahu
Could you take over a seller's VA loan?
Some sellers on Oʻahu have VA loans sitting at 2 to 3 percent. If you take over their loan, that rate can come with the house. It's not magic and it's not for everybody, but when it works it can save you a lot every month.
VA assumptions
You're taking over a loan, not getting a new one.
When you buy a house, you'd normally get a new mortgage at today's rate. With a VA assumption, you're applying to take over the seller's existing loan instead. I'll help you check the loan and what the servicer needs before you decide if it's worth pursuing.
If their rate's 2.75%, that's the rate you'd take over, along with the remaining balance and loan term. You still have to pay the seller the difference between the purchase price and what's left on the loan.
So the rate's only part of the decision. We'll also look at the cash you need and the time the paperwork could take.
Eligibility
You don't have to be a veteran.
Veterans
If you're a qualifying veteran, you can assume the loan and substitute your own VA entitlement. That can free up the seller's entitlement.
Non-veterans
You can assume a VA loan if you qualify with the servicer, even if you haven't served. But the seller's entitlement usually stays tied to the loan until it's paid off, so that needs a conversation.
About entitlement It's the VA's guarantee attached to the loan. It stays with that loan until a qualifying veteran substitutes theirs or the loan's paid off.
The equity gap
You'll need to cover the difference.
If the house sells for $850k and the loan balance is $600k, you've got a $250k gap to cover. I'll help you look at that number before you get attached to the rate.
Cash
You might use savings or proceeds from another sale. If you're considering TSP funds, talk with a financial professional first.
Secondary financing
Some lenders offer a second loan behind the assumption. It may have a higher rate, so we'll look at the combined payment rather than just the VA rate.
Seller financing
The seller might finance part of the gap as a note. You'll need a seller who's open to it and a servicer that accepts the arrangement.
Compare payments
See what the rate could change.
You can use numbers from a listing to compare the same financed amount at both rates.
- Assumed payment (P&I)
- $2,469
- Equity gap to cover
- $275,000
- New loan at market rate (P&I, 30-yr, same amount)
- $3,567
- Monthly difference
- $1,098
Illustrative estimates only. Principal & interest only — excludes taxes, insurance, HOA, mortgage insurance, and any secondary financing used to cover the gap. Not a loan offer. Talk to a lender.
Timeline
Here's what happens after you find a home.
- 01
Find the loan
I'll help you identify homes with VA loans and check the rate, balance and loan servicer.
- 02
Make the offer
We'll write the offer around the assumption, including extra time, equity-gap financing and servicer contingencies.
- 03
Apply with the servicer
You'll apply with the seller's loan servicer and provide income, credit and asset information. Expect paperwork and follow-up.
- 04
Get approval
The servicer underwrites and approves the assumption, along with release of liability and entitlement substitution when applicable.
- 05
Close
At closing, you take over the loan and the seller receives their equity.
Give it enough time. The servicer may take months rather than weeks. I'll account for that in the contract and follow up so you know where things stand.
For VA sellers
Your rate could help you sell.
If you've got a 2.5% loan that a buyer can assume, that could get their attention and help your negotiating position. I'll help you explain the option without promising something the servicer hasn't approved.
But before you list, let's talk about what the assumption means for you.
- Your entitlement may stay tied to the loan if a non-veteran assumes it. That can affect your next VA purchase.
- Your release of liability needs to come from the servicer at closing. Don't leave that unresolved.
- Your timing needs room for the assumption process. We'll factor that into your move.
FAQ
You might be wondering about these.
Disclaimer: Ryan Adams and eXp Realty Hawaiʻi are not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any government agency. All loan assumptions are subject to loan servicer approval and eligibility requirements. Calculator figures and examples are illustrative estimates only and are not a loan offer or commitment. Consult a licensed lender for loan terms and a tax or legal professional where appropriate.
Military imagery is for illustration only. Ryan Adams is not affiliated with or endorsed by the Department of Defense, the U.S. Army, or the VA.