You may be able to assume the seller's mortgage
liability when buying a house instead of having to apply for a new loan.
Assuming a loan could minimize your down payment or closing costs and get
you a more advantageous interest rate. To know whether an assumption will work,
find out the loan balance. If the balance is a small fraction of the purchase
price, you will have to come up with a large down payment or get a second loan
for the difference, unless the seller is willing to provide some of the
financing. If the loan balance is high, the loan may have been made when
interest rates were higher than they are today. Most newer loans that are
assumable have adjustable rates. If you are considering an assumption because of
credit problems, you will need the lender's approval to make the transaction
work.
