Expert Guide

Loan Assumption Strategy: Keeping Your Low Rate

January 2026

In my experience with VA lending, one of the most valuable but underutilized benefits of VA loans is the assumption feature. What most veterans don't realize is that this powerful option can provide significant financial advantages in our current rising rate environment.

What is Loan Assumption?

Loan assumption allows a qualified buyer to take over your existing VA loan terms, including your interest rate. After years in VA lending, I've learned this becomes particularly valuable when current market rates are higher than what you secured previously.

The key concept to understand is that your VA loan from 2020-2022 likely carries a rate that's substantially lower than today's market. Why relinquish that valuable asset when you sell?

The Current Market Reality

Veterans often ask me about strategies for their next home purchase given today's rates. Here's the insider knowledge I share: if you have a VA loan with a rate significantly below current market rates, leveraging loan assumption can create a win-win scenario for both you and your buyer.

For sellers, you can market your home with a compelling advantage - a below-market interest rate that comes with the property. For qualified buyers (veterans or non-veterans), they secure financing at terms unavailable anywhere else in today's market.

Important Considerations

What many don't understand about loan assumptions:

1. VA Entitlement Impact: If another veteran assumes your loan, you can request a substitution of entitlement. However, if a non-veteran assumes, your entitlement remains tied to that property until the loan is paid off.

2. Qualification Requirements: Assumers must still meet credit and income requirements, though these are often less stringent than new loan applications.

3. Funding Fee Advantage: The assumption funding fee is only 0.5% of the loan balance - substantially lower than new loan funding fees.

I created EZ-IRRRL because I saw veterans missing opportunities to optimize their VA benefits. Our streamlined process extends to helping coordinate loan assumptions, eliminating common processing headaches through automation.

Strategic Planning

If you're considering selling in this market, don't immediately assume refinancing your next purchase is the only option. Our automated system can quickly analyze whether a loan assumption strategy makes financial sense for your situation.

The advantage of working with a dedicated VA specialist is access to these types of strategic insights that typical lenders rarely discuss. At EZ-IRRRL, we've built our reputation on identifying every possible advantage for veterans.

This is not an offer to lend. Rates subject to change. Get an official Loan Estimate before choosing a loan. EZ-IRRRL is not affiliated with the U.S. Government.