Should I Let a Buyer Assume My VA Loan When I Sell My Hawaii Home?

Quick Answer: Maybe. If your VA loan has an interest rate well below current mortgage rates, the ability for a qualified buyer to assume that loan may make your Hawaii home more attractive. But an assumption is not automatically the best choice for the seller. Before agreeing to one, understand the buyer qualification process, your remaining loan balance, your equity, and what happens to your VA entitlement and liability.

A low-rate VA loan can change the way you think about the mortgage when you sell. It is no longer simply debt that needs to be paid off. The existing interest rate may itself be an attractive feature of the home.

There is another number that matters: the difference between your remaining VA loan balance and the home's purchase price. A buyer assuming the loan still needs a way to cover that difference, which can affect how practical the assumption is for a particular buyer.

The seller also needs to think beyond the current transaction. If you expect to use your VA benefit to purchase another home, ask how the assumption could affect your available VA entitlement. You should also understand the requirements for being released from liability on the existing loan.

This is not a decision I would make based on the interest rate alone. The rate may help attract buyers, but the assumption also has to work for your equity, your timeline and your plans after the sale.

If you are considering selling an Oahu home with a VA loan, MaryJo McGillicuddy, Realtor Associate and Military Relocation Professional (MRP), can help you evaluate how an assumable loan may fit into the selling strategy. Your loan servicer and the VA can explain the specific assumption, entitlement and release requirements for your loan. Call or text MaryJo at (808) 724-4629.