Assumable Mortgage in Myrtle Beach: How It Works and What It Costs

An assumable mortgage in Myrtle Beach lets you take over a seller’s existing loan instead of getting a new one. You step into the seller’s shoes, keep the loan’s interest rate and remaining term, and the lender approves you the way it would approve any borrower. It works on FHA, VA, and USDA loans. It almost never works on conventional ones.

That sounds like a shortcut, and sometimes it’s a good one. But the part a listing description leaves out is what you owe the seller at the closing table. I’ll walk you through how an assumption works, where it breaks, and how to tell whether a seller’s loan is worth chasing.

What is an assumable mortgage in Myrtle Beach and how does it work?

It’s a transfer of an existing loan from the seller to the buyer. You take over the remaining balance, the interest rate, and the years left on the loan. None of those terms get reset. The company that collects the seller’s payments, called the servicer, has to approve you first.

Approval means a review of your credit, income, and debts. That review is called underwriting, and it’s the same check you’d go through on a new loan. If you pass, the loan moves into your name. If you don’t, the deal doesn’t happen.

Here’s the part that matters. You’re inheriting the seller’s loan terms, not shopping for new ones. That’s the whole appeal when the seller locked a lower rate than what’s available today. It’s also the whole risk, because if the seller’s rate isn’t actually lower, you’ve taken on extra work for nothing.

Here’s why this question has come up so much. In late 2020 and early 2021, mortgage rates sat at or below 3 percent. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed average at 2.66 percent for the week of December 24, 2020, and 2.65 percent for the week of January 7, 2021, the lowest in the survey’s history, which goes back to 1971. Rates are higher now, as of this post’s October 2026 date, so a seller still holding one of those loans is holding something a new loan can’t match. That’s a snapshot in time, not a forecast, and it will date this paragraph.

Which types of loans can you assume?

FHA, VA, and USDA loans can be assumed. Most conventional loans can’t. Here’s each one, with the rule behind it.

Can you assume an FHA loan?

Yes. HUD’s handbooks state that all FHA-insured mortgages are assumable. FHA means the Federal Housing Administration, the part of HUD that insures these loans. Under the HUD Reform Act of 1989, any FHA loan closed on or after December 15, 1989 requires the new borrower to be credit-qualified, and that requirement lasts for the life of the loan. So you can’t simply take over the payments. The lender reviews you first.

Can you assume a VA loan if you’re not a veteran?

Yes. The VA Lender’s Handbook (Pamphlet 26-7, Chapter 5) says any purchaser may qualify to assume a VA loan, veteran or not. You still have to be approved. The twist is on the seller’s side. Entitlement is the part of the loan the VA guarantees, and it follows the veteran. If a non-veteran assumes the loan, the seller’s entitlement stays tied up in it. It comes back only when a veteran with enough entitlement of their own steps in, which the VA calls a substitution of entitlement. If you’re a veteran, my VA home loan page explains how entitlement works.

Can you assume a USDA loan?

Yes, with approval. USDA’s rule for guaranteed loans, 7 CFR 3555.256, covers a transfer with assumption and calls for Rural Development’s approval. It also says Rural Development may approve a supplemental loan alongside the assumption when more financing is needed to finish the deal. Most USDA homes in this area sit inland, so I wrote up where USDA loans still work in Horry County.

Can you assume a conventional loan?

Almost never. Fannie Mae’s Selling Guide, section B2-1.4-01, says conventional fixed-rate loans are not assumable. Most conventional loans also carry a due-on-sale clause, which lets the lender demand the entire balance when the property changes hands. Some conventional adjustable-rate loans can be assumed under specific conditions, so if a seller insists theirs is assumable, ask to see the note and have a real estate attorney read it. That’s the one place I’d send you to a lawyer before a lender.

What’s the catch with assuming a mortgage?

The catch is the gap. An assumption transfers the seller’s loan balance and nothing else. If the home is worth more than that balance, you owe the seller the difference, in cash, on top of what you’d normally pay to close.

Here’s the math. Take the agreed sale price and subtract the seller’s remaining loan balance. What’s left is the seller’s equity, meaning the part of the home they already own. A seller who has paid the loan down for years, or who bought before prices rose, has a lot of it. You have to replace all of it at closing. The assumed loan covers none of it.

What does an assumption look like with real numbers?

Here’s a made-up example, for illustration only. It is not a rate or a price you can count on today.

• A seller bought a home in 2020 with an FHA loan at 2.75 percent.
• Today, they still owe $270,000 on that loan.
• They agree to sell the home to you for $380,000.

Here’s the gap: $380,000 minus $270,000 is $110,000. You assume the $270,000 loan and keep its 2.75 percent rate. You also have to come up with the $110,000, because that’s the seller’s equity.

Here’s the part people miss. The low rate only applies to the $270,000. If you cover the $110,000 with a second loan, that loan is priced at whatever second loans cost when you close. If you cover it with savings, that’s cash you won’t have for anything else. Add the two pieces together and you get back to the $380,000 price. The question is whether keeping a 2.75 percent rate on $270,000 is worth the work and the cash it takes to close the gap. For some buyers it is. For others, a new loan comes out ahead.

There are three ways to fill the gap: cash you’ve saved, a second loan on the property, or a mix of both. Whether a second loan is allowed behind an assumed one depends on the loan type and the servicer, which is one reason I look at the specific file before anyone writes an offer.

The reverse is also true. A seller with little equity leaves a small gap, and a small gap makes an assumption much easier to pull off. The best candidates tend to be sellers who bought recently, financed most of the price, and locked a rate lower than today’s.

How does the assumption process work, step by step?

1. Confirm the loan type. Ask the seller’s agent whether it’s FHA, VA, or USDA, and get the servicer’s name.
2. Request the servicer’s assumption package. Each servicer has its own forms and requirements. Ask for the full list on day one.
3. Get approved. The servicer reviews your credit, income, and debts the way any lender would.
4. Settle the gap. Line up the cash or the second loan before the closing date, not after.
5. Close and record the deed. The loan moves into your name, and the seller’s release of liability should be issued at the same time.

Build extra time into the contract. The servicer controls the schedule on an assumption, not you and not me, and that’s where these deals most often slip.

What should sellers know before letting someone assume their loan?

Get a release of liability, in writing. A release of liability is the lender’s formal statement that you’re no longer responsible for the loan. Without it, the lender can still come after you if the new owner stops paying.

On FHA loans closed on or after December 15, 1989, HUD’s rules direct the lender to release the seller once it approves a creditworthy buyer. On VA loans, the VA Lender’s Handbook treats an approved assumption as a release of liability too. But a release alone does not restore your VA entitlement. That only happens when a veteran substitutes theirs. If you plan to use your VA benefit again, make the buyer’s entitlement part of the deal before you accept the offer.

One more warning. Handing over the keys and letting a buyer keep making your payments, without the lender’s approval, is called a “subject to” sale. It can let the lender call the loan due, and you stay on the hook. I wouldn’t do it. For the contract language, talk to your real estate attorney.

Is an assumable mortgage actually the better deal?

Sometimes. Often it isn’t. An assumption wins when three things line up: the seller’s rate is meaningfully lower than what a new loan would cost you, the gap is small enough for you to cover, and the remaining balance and years on the loan fit your plans. Miss any one of those and a new loan can come out ahead.

A new loan lets you pick your own term and keep more cash in the bank. An assumed loan locks you into someone else’s balance and someone else’s calendar. Sometimes the right move is to skip the assumption, negotiate the price, and finance the home the regular way. I’d rather tell you that now than watch you spend weeks chasing a loan that doesn’t make sense for your numbers.

What’s the one thing to do first?

Find out what kind of loan the seller has and what’s left on it, before you write an offer. Ask the listing agent. Everything else depends on the loan type and the gap.

An “assumable” label in a listing isn’t a promise. A conventional loan won’t qualify, and a great rate doesn’t help if the gap is more cash than you have.

Want me to run the numbers on an assumption?

If you’re looking at a Grand Strand home with an assumable loan, send me the loan type and the balance. I’ll compare the assumption to a new loan on your actual numbers and tell you which one wins, even when the winner is the one that doesn’t involve me. Get pre-qualified first so your numbers are ready when you find the house.

Frequently asked questions

Can you assume a mortgage if you’re not a veteran?

Yes, on a VA loan. The VA Lender’s Handbook says any purchaser may qualify to assume a VA loan, veteran or not, as long as the servicer approves you. The seller’s VA entitlement stays tied to the loan unless a veteran with enough entitlement of their own substitutes it.

Are conventional loans assumable?

Almost never. Fannie Mae’s Selling Guide says conventional fixed-rate loans are not assumable, and most conventional loans carry a due-on-sale clause that lets the lender demand the full balance when the property is sold. Some adjustable-rate loans can be assumed under specific conditions, so ask to see the note.

Do you have to pay the seller’s equity when you assume a loan?

Yes. An assumption takes over only the seller’s remaining loan balance. If the sale price is higher than that balance, you cover the difference with cash, a second loan, or both, and the size of that gap is often what decides whether an assumption works.

Does the seller get released from the loan after an assumption?

It should, but get it in writing. A release of liability is the lender’s formal statement that the seller is no longer responsible for the loan. On VA loans, a release by itself does not restore the seller’s entitlement unless a veteran buyer substitutes their own.

About Travis Buis

Travis Buis is a loan officer with Elite Home Lending serving Myrtle Beach and the Grand Strand, working with buyers and homeowners across Horry and Georgetown counties. He handles purchase, refinance, and investment financing, and spends a fair amount of his week on FHA, VA, and USDA files, where the program rules decide what’s possible before the numbers do. His approach is to explain the mechanics first so you can make the call yourself, then handle the loan once you have. Get in touch.

Travis Buis, NMLS #1711446. Elite Home Lending, LLC — NMLS #2788023. Equal Housing Opportunity.

This article is for educational purposes only and is not a commitment to lend or an offer of credit. Program terms, rates, and eligibility standards are set by lenders, investors, and agencies and are subject to change without notice. Loan approval is subject to underwriting, credit approval, and property eligibility. Calculator results are estimates only. Nothing here is tax or legal advice — consult your CPA or attorney for your situation.