3 VA loan assumption myths that are costing your clients money

The number of VA loan assumptions jumped from 308 in 2022 to 2,244 in 2023, a spike of more than 600 percent, according to VA testimony to Congress reported by Inside Mortgage Finance. That number keeps climbing as rates stay high and sellers realize what they’re sitting on. A VA loan assumption lets a qualified buyer take over the seller’s existing VA loan, at the seller’s original rate and remaining balance, instead of getting a new mortgage at today’s rate. That’s a strong selling point when older loans carry rates well below today’s market, and it’s also where the confusion starts. Three misunderstandings show up over and over, and each one can cost your client money or leave them exposed. 3 VA loan assumption myths Myth No. 1: Only a veteran can assume a VA loan Not true. Any creditworthy buyer can assume one, veteran or not. But that is exactly where the real risk hides. If the buyer is not a veteran substituting their own entitlement, the seller’s entitlement stays tied to that loan until it is paid off or refinanced, not released the way it would be in a normal sale. A veteran seller needs to hear that before accepting the offer, not after. Myth No. 2: The buyer only needs ...