Pros and Cons of Assuming a VA Loan

Pros and Cons of Assuming a VA Loan

For both buyers and sellers of military homes shortly, VA Loans might be an attractive option.

Are VA Loans Assumable?

VA loans are assumable, as long as you meet a number of requirements, which we’ll explain in full detail throughout this article. However, VA loans are not compatible with every situation. We can begin to understand whether a VA loan can be assumed by someone else once we answer a few questions about mortgage assumption and VA loan requirements in general.

What are the Pros and Cons of Assuming VA loan?

There are pros and cons to assuming a VA loan depending on whether you are the buyer or seller. Buyers should carefully consider all loan options since taking a VA loan may not be advantageous. It is highly recommended to consult a loan specialist with experience in VA loan assumptions.


  • When you take over the VA loan, you don’t have to apply for a new one. By avoiding closing costs and appraisal fees, it is possible to save a lot of money.
  • The VA charges an average of 2.15% for VA funding fees for those who use VA loans for the first time; for those who use VA loans for the second time, the fee is higher, but only 1.44%0.5% for assumption, which is far less than other fees.
  • An original VA loan approved at a very low-interest rate is likely to have a higher interest rate on a new VA loan. Buying a home in 2011 at a rate of 3.31% will save the buyer hundreds of dollars on their VA loan in 2018.
  • VA sellers will benefit when this situation arises since the buying pool will include those interested in VA loans. In addition to the favorable interest rate, sellers often highlight it in advertisements.
  • Veteran buyers assume VA loans because they receive their VA benefits in total, which presents less risk to the seller.


  • Buyers who want to swap VA entitlements with sellers must certify the loan assumption is for a primary residence.
  • If a civilian buyer assumes the VA loan, the seller’s remaining entitlement will remain on the original loan. Following the repayment of the loan, the veteran will regain their eligibility. Therefore, if the veteran owner lost part of their benefit through a short sale or foreclosure, a short sale or foreclosure could be considered by the civilian owner.
  • VA loans do not have to be assumed by lenders.
  • Some lenders do not automatically assume VA loans. VA loan offices must review every request, and everyone involved with the home sale must wait until the VA responds.
  • Down payments could be highly high for buyers with a history of defaulting on loans.

The original VA seller must obtain a Release of Liability form following the assumption process. By protecting the seller from future liability about the initial loan, this document ensures the actual loan terms are passed on to the buyer.

VA loan assumptions are one of the options available to homebuyers today.

A homebuyer should consider location, affordability, finances, and homeownership responsibilities. Military life is the focus of MilitaryByOwner.

It is essential not to overlook the current interest rate.


It is one of the most compelling reasons not to assume an existing VA loan when the current interest rate environment is so much more attractive than existing terms. Before committing to a loan, you should compare its terms and rates with current rates. We provide rate quotes from several competing lenders, free of charge and without credit checks. You could save significantly more if you obtained a new loan instead of taking out an older, higher-interest loan.

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