Is there a way to take over a seller’s lower mortgage rate in San Angelo? If you are buying in a higher-rate market, an assumable mortgage can be a smart path to savings. You want clear answers on which loans are assumable, how the process works in Texas, and what it costs. This guide breaks it down with local steps, timelines, and tips for spotting real opportunities in Tom Green County. Let’s dive in.
What an assumable mortgage means
An assumption is when you take over the seller’s existing home loan and its terms. You inherit the interest rate, remaining balance, and remaining years on that loan. The lender must approve you, and there is a written assumption agreement signed and recorded at closing. Without formal approval, a due-on-sale clause can allow the lender to call the loan due.
Sellers also need protection. Unless the lender issues a written release of liability, the seller may remain on the hook for the loan after the transfer. Make sure the release is addressed early.
Which loans are assumable
VA loans
VA loans are generally assumable with VA and servicer approval. You must qualify under the servicer’s underwriting standards. The seller should ask for a VA release of liability so their VA entitlement can be restored.
FHA loans
FHA-insured loans are typically assumable with servicer approval and buyer creditworthiness. Mortgage insurance stays with the loan after assumption. Plan for the monthly MIP to continue.
Conventional loans
Many conventional loans include due-on-sale clauses. A lender may deny an assumption or require full underwriting. Some investor-owned loans have specific rules, so you must check the servicer’s policy.
Seller-carry vs true assumption
A true assumption is lender approved and documented at closing. “Subject-to” or seller financing is different and riskier. Without the lender’s consent, the loan could be called due and the seller could remain liable.
San Angelo process and timeline
Most assumptions take 30 to 60 days from application to closing. Underwriting with the servicer often runs 2 to 6 weeks, depending on workload. Once approved, local title companies usually need 1 to 3 weeks to complete title work, prepare documents, and record with the Tom Green County Clerk.
Documents you will need
- Assumption application with the current loan servicer
- Credit authorization and standard borrower docs: pay stubs, W-2s or 1099s, tax returns, bank statements, employment verification, government ID
- Signed purchase contract with an assumption contingency
- Title company forms: assumption agreement, deed, title insurance policy or endorsement, closing statements
Costs buyers should expect
- Lender or servicer assumption fee
- Credit report and possible appraisal
- Title insurance and title search
- Recording and standard county fees in Tom Green County
- Escrow or closing agent fees
- Funds for the seller’s equity if the price is above the remaining loan balance
If the home price is higher than the loan balance, you must cover the equity gap with cash or a second mortgage. If you cannot fund the gap, the assumption cannot close.
Pros and cons in today’s market
Pros
- Lower interest rate than current market if the seller’s rate is attractive
- Possible lower upfront costs than a brand-new loan, depending on fees
- A path for qualified buyers who can meet assumption underwriting
Cons
- You may need significant cash or secondary financing to cover the seller’s equity
- FHA mortgage insurance continues after assumption
- Some loans have less favorable terms for your goals, like a long remaining term
- Lenders or servicers can deny assumptions or take longer to process
When it makes sense in San Angelo
An assumption tends to work when the seller’s fixed rate is well below today’s market. You can cover the equity gap without expensive financing. You can pass underwriting and the servicer will release the seller from liability. The loan terms fit your plan, with no prepayment penalty and an acceptable remaining term and insurance status.
How to spot assumable listings
Sellers often note “assumable,” “VA assumable,” or “FHA assumable” in listing remarks. Check the financing or terms fields in the MLS or IDX feed for assumption options. Create keyword alerts for “assumable,” “assumption,” “VA assumable,” “FHA assumable,” “sell/assume,” and “take over loan.”
If a listing hints at assumability, ask the listing agent to confirm the loan type and servicer. Request permission to contact the servicer or ask the listing agent to obtain a written statement on the assumption process and whether the seller can get a release.
Step-by-step checklist for buyers
Before you offer
- Confirm the loan type and whether the listing says “assumable”
- Ask for the servicer name, current balance, and any available loan documents
- Request a written servicer statement on assumption requirements and seller release
If you proceed
- Submit the servicer’s assumption application and provide income and credit docs fast
- Engage a San Angelo title company to start title work and prepare recording
- Decide how you will cover the seller’s equity: cash or a second loan
- Seek conditional approval and confirm the seller’s release of liability
- Schedule closing, confirm prorations, and plan for recording with the county clerk
After closing
- Set up the new loan account and payment instructions with the servicer
- The seller should retain written proof of release of liability
Local closing notes for Tom Green County
Texas title companies typically handle the closing, title search, and document recording with the Tom Green County Clerk. Property taxes and HOA dues, if applicable, are prorated at closing as usual. Texas homestead rules can affect owners’ rights, but they do not remove lender claims under an assumed mortgage. If you see unusual loan provisions or have VA entitlement questions, talk with your title company or a real estate attorney.
Protect yourself and the seller
Ask early about the seller’s release of liability. For VA loans, the seller should request the VA-specific release to restore entitlement. Make your purchase contract contingent on assumption approval and the seller’s release when needed. Keep all servicer approvals in writing.
Your next step
If you want to explore assumable options, start with a quick scan for VA and FHA listings and verify the servicer’s policy before you write an offer. I can help you screen listings, confirm requirements with the servicer, and coordinate a smooth title and recording process in Tom Green County. For hands-on guidance and local market insight, reach out to Roy Zesch. Get your instant home valuation.
FAQs
What is a mortgage assumption in Texas?
- It is when you take over the seller’s existing loan, including its rate, balance, and term, with servicer approval and a recorded assumption agreement.
Are FHA and VA loans in San Angelo assumable?
- Yes, they are generally assumable with agency and servicer approval and buyer underwriting; approval is not automatic.
How long does an assumption take in Tom Green County?
- Plan for 30 to 60 days from application to closing, with 2 to 6 weeks for servicer underwriting and 1 to 3 weeks for title and recording.
Who pays the equity difference on an assumption?
- The buyer covers the gap between the purchase price and remaining loan balance with cash or a second loan.
Does FHA mortgage insurance remain after assumption?
- Yes, FHA mortgage insurance continues on the assumed loan and is included in your monthly payment.
Will a VA seller be released from liability after assumption?
- Only if the servicer and VA issue a formal release; the seller should request it to restore VA entitlement.
Can the lender deny a mortgage assumption?
- Yes, lenders or servicers can deny an assumption or require full underwriting; some conventional loans do not permit assumptions.
How do I find assumable homes in San Angelo?
- Watch listing remarks and financing fields for “assumable,” set keyword alerts, and ask the listing agent to confirm the loan type and servicer.
