Selling a Las Vegas Home with an Assumable Mortgage

by Ryan Rose

If you locked in a low interest rate during 2020-2022, your mortgage may be one of your home's most valuable features. FHA and VA loans are assumable, meaning a qualified buyer can take over your loan at your existing rate. In today's higher rate environment, this can be a significant selling advantage.

What Is Mortgage Assumption?

When a buyer assumes your mortgage, they take over your existing loan with its current terms, including your interest rate. They do not get a new loan at today's rates. They step into your shoes on the original loan.

Factor	Your Loan	Current Market Rate
Interest rate	3.25%	6.75%
Payment on $350K	$1,523	$2,270
Monthly savings	$747

Which Loans Are Assumable?

FHA loans: Assumable with lender approval. The buyer must qualify based on FHA guidelines.

VA loans: Assumable with lender approval. Non-veterans can assume VA loans, though VA entitlement considerations apply to the original borrower.

Conventional loans: Generally not assumable. Most have due-on-sale clauses requiring payoff upon transfer.

USDA loans: Assumable with approval in some cases.

The Equity Gap Challenge

Here is the complication: the buyer assumes your remaining loan balance, not the purchase price. The difference between your sale price and loan balance is equity the buyer must cover.

Example: Your home sells for $500,000. Your loan balance is $320,000. The buyer assumes the $320,000 loan but must bring $180,000 for the equity gap (plus closing costs).

Few buyers have $180,000 in cash. Solutions include:

Second mortgage. The buyer gets a second loan to cover the equity gap. This second loan will be at current rates.

Seller financing. You carry a note for part of the equity gap.

Large down payment. Some buyers have significant cash from previous home sales or other sources.

The Assumption Process

Assumptions take longer than regular sales:

Lender approval required. The buyer must qualify with your lender, not just any lender.

Processing time. Assumptions can take 60-90 days or longer, compared to 30-45 days for regular sales.

Documentation. The buyer submits a full application to your lender.

Release of liability. You want formal release from liability on the loan. Without it, you remain responsible if the buyer defaults.

VA Loan Specific Considerations

If you have a VA loan:

Entitlement. Your VA entitlement may remain tied to the assumed loan until the buyer (if a veteran) substitutes their entitlement or the loan is paid off.

Funding fee. The assuming buyer may owe a VA funding fee.

Non-veteran assumption. Non-veterans can assume VA loans, but your entitlement remains committed.

Consult with a VA loan specialist to understand implications for your specific situation.

Marketing an Assumable Loan

If you have an assumable loan with a rate significantly below current market rates, highlight this in your listing:

Advertise the rate. "Assumable 3.25% FHA loan" catches buyer attention.

Show payment savings. Calculate monthly savings compared to current rates.

Target informed buyers. Real estate investors and savvy buyers actively seek assumable loans.

Is It Worth the Complexity?

Assumptions add complexity and time. They make sense when:

Rate differential is significant. A 3% rate versus 7% market rate is compelling. A 5.5% rate versus 6.5% may not be worth the hassle.

Equity gap is manageable. If buyers need huge second mortgages, the advantage diminishes.

You can wait. Longer closing timelines require patience.

Where to Start

If you have an FHA or VA loan with a low rate and want to explore assumption as a selling strategy, I can help you evaluate whether it makes sense for your situation and how to market this advantage effectively.

Ready to discuss your options? Request a free home evaluation here or reach out directly to talk through your situation.

Frequently Asked Questions About Assumable Mortgages in Las Vegas

Q1: What types of mortgages are assumable in Las Vegas?

FHA and VA loans are assumable with lender approval. USDA loans may also be assumable in some cases. Conventional loans typically are not assumable due to due-on-sale clauses that require full payoff when the property transfers ownership.

Q2: How much money does a buyer save by assuming my low-rate mortgage?

The savings can be substantial. For example, on a $350,000 loan, a 3.25% assumable rate results in a monthly payment of approximately $1,523, compared to $2,270 at a 6.75% current market rate—saving the buyer $747 per month or nearly $9,000 annually.

Q3: What is the equity gap and how do buyers cover it?

The equity gap is the difference between your home's sale price and your remaining loan balance. If you sell for $500,000 but owe $320,000, the buyer must cover the $180,000 gap. Buyers typically handle this through a second mortgage, seller financing, or a large cash down payment.

Q4: How long does the mortgage assumption process take?

Mortgage assumptions typically take 60-90 days or longer, compared to 30-45 days for traditional sales. The buyer must qualify with your existing lender and complete full documentation, which extends the timeline considerably.

Q5: Will I remain liable for the mortgage after the buyer assumes it?

Not if you obtain a formal release of liability from the lender. This is critical—without it, you could remain responsible if the buyer defaults. Always ensure your assumption agreement includes a complete release of liability as part of the approval process.

Q6: Can a non-veteran assume my VA loan?

Yes, non-veterans can assume VA loans with lender approval. However, your VA entitlement will remain tied to the loan until it's paid off or another veteran substitutes their entitlement. This could affect your ability to use your VA benefits for another purchase.

Q7: Should I market my assumable mortgage when selling my Las Vegas home?

Absolutely, if your rate is significantly below current market rates. Advertise the specific interest rate, calculate and showcase monthly payment savings, and emphasize this benefit in your listing. Savvy buyers and investors actively search for assumable loans in today's higher-rate environment.

Q8: When does offering an assumable mortgage make the most sense?

An assumable mortgage is most advantageous when there's a significant rate differential (for example, 3% vs. 7%), the equity gap is manageable for buyers to cover, and you can accommodate a longer closing timeline. If the rate difference is minimal or the equity gap is too large, traditional selling may be more practical.

Q9: Does the buyer need to qualify for an assumable mortgage?

Yes, the buyer must qualify with your existing lender based on FHA or VA guidelines (depending on loan type). They'll submit a complete loan application and must meet credit, income, and debt-to-income requirements, just as they would with a new mortgage.

Q10: How does Las Vegas' current real estate market affect assumable mortgages?

With Las Vegas home prices remaining relatively stable in 2025 and interest rates significantly higher than 2020-2022 levels, assumable mortgages have become a powerful selling tool. Buyers are highly motivated to secure lower monthly payments, making homes with assumable low-rate mortgages more competitive in the Las Vegas market.