Assumable Loans in Hays County: What Buyers and Sellers Need to Know

kristinallan13
Sep 5
3 min read

When navigating today’s real estate market in Hays County, creative financing options are becoming more important than ever. One term you may have heard recently is “assumable loan.” For buyers looking at homes in Kyle, Buda, San Marcos, or anywhere across Hays County, assumable loans can be a unique opportunity to save money on interest rates while making homeownership more affordable.

What Is an Assumable Loan?

An assumable loan allows a homebuyer to take over the seller’s existing mortgage, including the remaining balance, interest rate, and terms. This can be a huge advantage if the seller locked in a lower interest rate than what’s currently available. Instead of starting a brand-new loan at today’s rates, the buyer “assumes” the seller’s mortgage.

This is especially valuable in today’s market, where mortgage rates are higher than they were just a few years ago. For Hays County homebuyers, this could mean lower monthly payments and the ability to qualify for more home.

VA Loans and Assumability

One of the most common types of assumable mortgages is a VA loan. VA loans, offered to veterans and active-duty military members, often come with excellent terms and no down payment requirement. They are also fully assumable—meaning both veterans and non-veterans can take over an existing VA loan if approved by the lender.

However, it’s important to note how this can affect the seller’s VA eligibility. If a buyer assumes a VA loan and does not substitute their own VA entitlement, the seller’s VA entitlement remains tied up in that property until the loan is paid off. In simple terms:

If the seller wants to buy another home using their VA benefit, their entitlement may not be fully available.
This can impact their ability to qualify for another VA loan on their next home purchase.

For Hays County sellers who are veterans, it’s crucial to discuss with a knowledgeable Hays County realtor and lender before agreeing to an assumption.

Why Buyers Love Assumable Loans

Lower interest rates: If the seller secured a 3% rate a few years ago, you could inherit that instead of today’s higher rates.
Lower monthly payments: A lower rate directly translates into more affordable payments.
Easier qualification: Sometimes assuming a loan may be easier than qualifying for a brand-new mortgage.

Why Sellers Should Proceed Carefully

While offering an assumable loan can make a property more attractive to buyers, sellers—especially veterans—need to weigh the impact on future home purchases. A VA loan assumption can limit your VA eligibility until the loan is fully paid off, unless the buyer is also a veteran willing to substitute their entitlement.

Final Thoughts

Whether you’re buying or selling a home in Kyle, Buda, San Marcos, or greater Hays County, understanding assumable loans is a powerful tool in today’s real estate market. Buyers can benefit from lower rates, while sellers can make their property more appealing. But veterans especially need to carefully consider how a VA loan assumption may affect their future home-buying plans.

As your Hays County real estate expert, I can guide you through the process, connect you with trusted lenders, and help you understand how assumable loans might fit into your buying or selling strategy.👉 Follow me on Instagram @512homes for more local real estate tips, Hays County market updates, and behind-the-scenes looks at the home buying and selling process.