Buying a home in California is difficult today. Prices keep rising, interest rates change often, and many buyers struggle to qualify for a new mortgage. But military families have an option that many do not fully understand. A VA loan can still be assumed in 2025, and this feature can help save thousands of dollars when used the right way.

An assumable VA loan allows a buyer to take over the seller’s existing mortgage. This means the buyer steps into the same interest rate, monthly payment, and remaining loan term. In a high rate market, this can be a major financial advantage. Many sellers locked in very low rates years ago, and assuming that loan can help a buyer avoid the higher rates offered today.

What It Means When a VA Loan Is Assumable

When a loan is assumable, the new buyer does not need a brand new mortgage. Instead, the buyer takes over the seller’s current loan exactly as it is. This includes:

• The original interest rate
  
  
• The remaining loan balance
  
  
• The remaining years left on the loan
  

For California buyers, this can create big savings because older VA loans often have rates between three percent and four percent. With today’s market sitting much higher, assuming a low rate can lower monthly payments by hundreds of dollars.

Why Assumable VA Loans Matter in 2025

The ability to assume an existing VA loan is becoming more popular. Here are the main reasons:

Interest rates are higher now

Many sellers locked in low fixed rates years ago. Buyers who assume those loans avoid new high rate loans.

Buyers can reduce monthly payments

Lower rates mean smaller monthly payments, which is important in a high cost state like California.

Homes become easier to sell

Sellers who offer an assumable VA loan attract more buyers because the payment is more affordable.

Families build equity faster

With lower payments, more money goes toward the principal. This helps families build long term equity with less financial pressure.

How VA Loan Assumption Works in California

Here is a clear example to show how the process looks:

1. A seller has a VA loan with a rate of three point seven five percent and a remaining balance of three hundred thousand dollars.
   
   
2. The current value of the home is four hundred fifty thousand dollars.
   
   
3. A buyer wants the home and applies to assume the seller’s VA loan.
   
   
4. If approved, the buyer takes over the existing loan at the low rate.
   
   
5. The buyer must pay the seller the equity difference, which is the value of the home minus the loan balance.
   
   
6. The buyer now has a lower monthly payment compared to getting a new loan at today’s higher rates.
   

This process is managed by the lender and includes credit checks, income review, and approval steps.

Comparison Table: Assumable VA Loan vs New VA Loan vs Conventional Loan

Important Things to Know Before Assuming a VA Loan

You must qualify

The lender checks your credit, income, and debt levels before approval.

You might need cash

If the seller has equity in the home, you must pay that amount, either with cash or a second loan.

VA entitlement rules

If the buyer is not a veteran, the seller’s VA entitlement stays tied to the loan until it is paid off. If the buyer is a veteran and substitutes their entitlement, the seller may get theirs back.

Timing can vary

Some assumptions finish quickly, but others take time depending on lender processing.

How Much Can a Military Family Save

Savings can be large. Here is an easy comparison:

• Remaining loan balance: three hundred thousand dollars
  
  
• Seller’s interest rate: three point seven five percent
  
  
• New VA loan rate in 2025: around six percent or higher
  
  

Assuming the lower rate can save around four hundred to five hundred dollars per month. Over one year, that adds up to thousands. Over several years, the savings can be tens of thousands of dollars. This is a big benefit for families living in expensive California counties.

Why This Option Helps California Buyers Most

California home prices are higher than most states. This makes low interest loans even more valuable. Many buyers cannot handle large monthly payments from new high rate loans. But assuming a low rate VA loan reduces financial strain and allows families to buy in areas they otherwise could not afford.

Military communities in California such as San Diego, Oceanside, Sacramento, and Lemoore see more VA loan activity. Because of this, assumable VA loans are found more often in these regions.

Should You Consider an Assumable VA Loan

You should consider assumption if:

• You want a lower rate than today’s market
  
  
• You can cover the equity difference
  
  
• You are comfortable with a longer approval process
  
  
• You want a lower monthly payment and long term savings
  
  

Many families find this option helps them qualify for homes that seemed out of reach before.

Merchants Home Lending can help California buyers understand whether a VA loan assumption is the best choice for their situation.

Frequently Asked Questions

1. Can a non veteran assume a VA loan

Yes, as long as the buyer meets lender approval.

2. Does the VA charge a funding fee for assumptions

In most cases, yes, but the amount is smaller than a typical VA purchase funding fee.

3. What is the biggest cost when assuming a VA loan

The buyer must usually pay the seller’s equity, which is the difference between the home value and the remaining loan balance.

4. Does the interest rate change after assumption

No. The buyer keeps the exact same rate that the seller had.

5. Is it easier than getting a new loan

It can be, but approval depends on lender processing and the buyer’s financial details.