Assumable mortgage
A mortgage a buyer can take over from the seller, keeping its rate and remaining term. FHA, VA and USDA loans are generally assumable with lender approval; most conventional loans are not. The buyer pays the seller's equity in cash or other financing.
Also called: loan assumption, assumable loan, assumption
Related terms
A mortgage insured by the Federal Housing Administration, allowing low down payments and more flexible credit standards. Borrowers pay an upfront and annual mortgage insurance premium, and loan amounts are capped by county.
A mortgage guaranteed by the Department of Veterans Affairs for eligible veterans, service members and some surviving spouses. It usually needs no down payment and no monthly mortgage insurance, but most borrowers pay a one-time funding fee.
The percentage a lender charges to borrow money, used to figure the interest part of each payment. It does not include fees, which is why the APR is often higher.
The part of a property's value you own outright: its market value minus what you owe on loans against it. Equity grows as you pay down the loan and as the property gains value.
An arrangement where the seller lends the buyer some or all of the purchase price, and the buyer pays the seller over time. Terms are negotiated, often with a balloon payment, and the seller usually holds a lien until paid.