The Assumable mortgage may attract buyers when current mortgage rates are high, since closing costs are considerably lower than those of traditional mortgages. 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 Although adjustable-rate mortgages may be exempt, conventional loans backed by Fannie Mae and Freddie Mac are generally not assumable. The buyer takes over the seller’s mortgage payments, but the original loan remains in the seller’s name. Because the lender isn’t involved in underwriting, the seller remains liable for the mortgage. If the buyer defaults, both the buyer’s and seller’s credit scores suffer, creating financial risk for the seller. Loan assumption is when you take over full responsibility of the mortgage loan. This removes your spouse’s name from the loan, leaving you as the sole remaining borrower. The buyer also has to pay the lender an assumption fee, usually between 0.05% and 1% of the original loan amount. Loan assumptions usually take between 45 and 90 days (but can take longer) to process

   

      

     

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