One of the most overlooked financing tools in today’s real estate market is the assumable loan. And if you’re a homeowner who bought in 2020 or 2021—or a buyer now facing 7% interest rates—you might be sitting on (or chasing) a rare and valuable opportunity.

At Adam Timothy Group, we work with both sides of this equation every day. Many of our seller clients locked in historically low interest rates—some as low as 2.5%—and are now exploring how to make those rates a key part of their marketing strategy. Meanwhile, our buyers are doing the math on monthly payments and often wondering how anyone is affording a home in this environment. The truth is: they’re not wrong to ask. Assumable loans—when structured correctly—can be a game-changer. But there’s a catch. Actually, several.

What Is an Assumable Loan?

In simple terms, an assumable loan allows a buyer to take over a seller’s existing mortgage—including the interest rate, balance, and terms. The buyer steps into the loan as if they were the original borrower, which can mean massive savings if the original rate is lower than current market rates.

Only certain loans qualify, including FHA loans, VA loans, and USDA loans. Conventional loans typically do not allow assumptions. And even with an eligible loan, the buyer must still qualify through the existing lender, and the assumption has to be formally approved.

Why They Matter Now

Let’s say a seller in Austin has a $400,000 home with a 2.9% FHA loan and owes $310,000. Today’s rates are closer to 6.75%. That original loan could be worth tens of thousands in savings to a buyer.

But here’s the challenge: the buyer has to cover the $90,000 difference between what the seller owes and the price of the home. And in most cases, that means cash or a second loan.

Assumable loans—when structured correctly—can be a game-changer. But there’s a catch. Actually, several. You need a lender who understands the process, a buyer who can qualify, and either cash on hand or a strategy to cover the equity gap.

That’s why, while many agents talk about assumable loans, very few have actually completed one. The concept is compelling—but the execution requires patience, financial creativity, and a team that knows how to navigate the complexity.

The Gap That Keeps Deals From Happening

Many traditional buyers today plan to put 5–10% down. That’s realistic—and smart financial planning. But most assumable loan situations require 20% or more in cash to bridge the equity gap. Our average buyer client does not wish to deploy that much capital upfront.

Investors, on the other hand, are used to that. 20–25% down is standard for investment purchases, which means they’re better positioned to take advantage of assumable loans. We’ve seen this repeatedly: a great property with an assumable loan gets picked up by a slick investor who knows exactly what they’re doing—while everyday buyers get left behind.

And that’s the frustrating part. There’s a huge disconnect between the people who need these low rates and the people who are positioned to take advantage of them.

What We Tell Our Clients in Texas

If you’re a seller, and your home has an FHA or VA loan from 2020 or 2021, this is an asset. You may not be able to offer the cheapest home on the market—but you can offer the cheapest monthly payment. And that’s what buyers actually care about.

If you’re a buyer, ask your agent if any of the homes you’re touring have assumable loans. You won’t find this info in most listings—it’s rarely marketed well. And while the process is more complex and slower than a traditional sale, it can unlock real affordability.

It Pays to Be Strategic

Texas doesn’t block assumptions, but it doesn’t streamline them either. Lenders control the pace, and the process can take 60–90 days or more. VA loans in Texas can be assumed by civilians, but only military buyers restore the seller’s entitlement. And Texas being a community property state may mean extra signatures or steps if you’re buying while married.

It’s not impossible—but you do need the right team, the right lender, and the right strategy.

At Adam Timothy Group, we don’t just chase transactions. We connect real people—buyers and sellers—with smart solutions that match their goals and circumstances. Assumable loans are just one of the many tools we leverage to create win-win outcomes in a challenging market.

If you’re a buyer feeling priced out, or a seller sitting on a golden interest rate, let’s talk. We’ll help you figure out whether an assumption could work for you—and how to structure it in a way that protects your equity, your finances, and your peace of mind.

At Adam Timothy Group, we believe an informed client is a great partner in the home buying or selling process. We’re not here to sugarcoat the market—we’re here to help you make sense of it. Assumable loans can offer real value, but only when you understand how they work and where the pitfalls are.

Whether you’re holding onto a low-rate mortgage or looking for creative ways to afford your next home, we’re here to help you navigate the options with clarity and confidence. Don’t go it alone. Let’s talk today.

Let’s find your path forward—together.