If you're a homeowner with a VA loan and considering selling your property, there's good news! Your VA loan may be assumable, allowing qualified buyers to take over the existing mortgage terms. This can be a fantastic selling point for your property, especially in today’s fluctuating interest rate market. Here’s everything you need to know about selling your home with a VA assumable loan in Colorado Springs.
A VA assumable loan is a unique type of mortgage that allows the buyer to assume (or take over) the current terms, rate, and balance of your existing VA loan. This can be appealing for buyers, especially when interest rates are higher than when you locked in your original rate. It’s also a potential win for sellers because it can make your home more attractive and marketable.
Not all VA loans are assumable, so the first step is to check with your lender. You’ll need to confirm that your loan includes this option, which is often detailed in your original loan documents. If it’s not clear, contact your mortgage servicer to verify.
If your loan is assumable, you’ll need to notify your servicer of your intent to sell the property and allow the loan assumption. Your servicer will guide you through the process and provide specific requirements and forms.
For a buyer to assume your VA loan, they must meet specific credit and income requirements set by the lender. The VA has guidelines, but each lender may have its own criteria, so the buyer should be prepared for a thorough qualification process.
Key Requirements for Buyers:
Once a qualified buyer is found, negotiate the terms of the sale, including any potential down payment to cover the difference between your loan balance and the sales price. As with any home sale, you’ll sign a purchase contract that outlines all agreed-upon terms, including the assumption of the loan.
This is a critical step for you as the seller. If you’re planning to use your VA entitlement for a future home purchase, you’ll need to request that the buyer substitute their VA eligibility for yours, freeing up your entitlement. This is essential to avoid having your entitlement tied up in the assumed loan.
The lender will review the buyer’s eligibility and finalize the loan assumption, which typically involves fees. Once approved, the closing process will move forward as usual, with the buyer assuming your loan and taking ownership of the property.
Selling a home with a VA assumable loan in Colorado Springs can offer a significant advantage, especially for buyers looking to secure a lower interest rate. With a bit of due diligence and the right guidance, this process can be smooth and rewarding. Always consult with a knowledgeable real estate agent (like me!) and your loan servicer to ensure everything goes according to plan.
If you’re ready to explore selling your home with a VA assumable loan or have questions about the process, I’m here to help! Feel free to reach out to me for a personalized consultation.
📲 Nicole Strom
🌐 NicoleStromRealtor.com
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📞 719-922-0102
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Nicole is a mom, grandma, a retired military spouse of over 25 years, as well as a full time Real Estate Professional serving her clients in and around Colorado Springs.
You need a REALTOR® with vast experience and knowledge of our specific market. You need a REALTOR® that genuinely cares about you and puts your needs first. You need a REALTOR® you can trust. Nicole is that REALTOR®.