Benefits

• When current interest rates are high and the original interest on a mortgage is low, both seller and buyer can benefit from an assumable mortgage. The seller sells, and the buyer takes over the loan at an affordable rate.
  
  

Risk

• Unless very carefully crafted, an assumable mortgage can leave the seller liable for the unpaid debt if the buyer defaults.
  
  

Lender

• An assumable mortgage does not benefit the lender. Therefore, lenders now include a "due-upon-sale" clause in mortgages.
  
  

Qualifying

• Because assumable loans are not good for the lender, mortgage companies usually require extremely strict buyer qualifications. This is not true in the case of Veterans Affairs or Federal Housing Administration loans.
  
  

Release of Liability

• Sellers need a "release of liability" from the lender before agreeing to an assumable mortgage. Otherwise, the seller might find getting a new mortgage almost impossible.