With mortgage rates soaring, taking over existing mortgages is gaining steam

As mortgage rates continue their upward climb after reaching highs not seen in more than 20 years, another trend not seen in decades has reemerged: More buyers are looking to assume a seller's loan in order to avoid today's interest rates. An assumable mortgage allows homebuyers to take over a seller's existing mortgage rather than applying for a new one, thereby allowing them to take over the terms, including the interest rate.

Christopher Tapia is a real estate agent for Compass in Florida, and says for months he has been actively encouraging buyers to look for homes whose sellers have assumable loans, because he says it is often the only way lower or middle-income families can achieve the American dream in this market.

Chris Birk, vice president of mortgage insight at Veterans United Home Loans, acknowledged mortgage assumptions are gaining more attention these days. A Veterans United analysis of Ginnie Mae data through June indicates three-quarters of VA homeowners currently have a mortgage rate below 4%, making the assumption of those loans an attractive option – and more sellers are advertising assumptions in their home listings, according to the company.

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