Which types of loans are known to be assumable?

The types of loans that are known to be assumable are FHA and VA loans. An assumable loan allows a buyer to take over the seller's existing mortgage under its current terms, which can be advantageous for the buyer if the original loan has a lower interest rate than current market rates. FHA (Federal Housing Administration) and VA (Department of Veterans Affairs) loans specifically offer this feature, making them more flexible for both sellers and buyers.

Assuming an FHA or VA loan can be beneficial in a fluctuating interest rate environment, allowing the buyer to save on interest costs compared to obtaining a new loan at market rates. Additionally, assumability can expand the pool of potential buyers for sellers since they can offer buyers access to favorable loan terms.

In contrast, conventional loans, which are not backed by a government agency, typically do not offer assumability without specific lender approval. Private loans and hard money loans often have more restrictive terms and conditions that do not allow for assumption. Fixed-rate and adjustable-rate designations refer to the nature of the loan structure itself rather than its transferability.