Why Financial Literacy Matters in Real Estate: The Hidden Power of Loan Assumptions

In 2020, while I was happily married, I purchased my first home. It was a huge accomplishment rooted in love, stability, and the dream of building a future. I used an FHA loan, which made homeownership feel accessible with its low down payment and flexible credit criteria. But even with those benefits, the approval process was rigorous and emotionally taxing. It required persistence, paperwork, and patience.

Fast forward to today, and life looks different. I'm now navigating a divorce, and with that comes the complicated process of addressing marital property, including the home we once shared. What I’ve learned is that transferring ownership due to divorce is known as an exempt transfer, and it comes with specific legal and financial implications that many people (myself included) aren’t made fully aware of until they're deep in it.

The process of buying a home revealed just how many hidden steps exist, especially for Black and Brown families. Approval disparities, lack of access to resources, and limited financial guidance are ongoing barriers. Even with similar financial profiles, people of color are less likely to be approved for mortgages or receive favorable loan terms (Federal Reserve Bank of Philadelphia, 2024). This isn’t just about individual credit—it’s about a system that still has layers of inequality built into it.

Today, I’m exploring the possibility of selling my home. But recently, I discovered something shocking: my FHA loan is assumable. That means another person, if approved, could take over my mortgage at the original interest rate, which is just 2.6%. In today’s market, where interest rates for FHA loans average over 6.45% (Mortgage News Daily, 2025), that’s a huge advantage.

What hurts is that I’ve spent the last two years calling my mortgage company for options, and this never came up. It wasn’t until a family friend mentioned loan assumptions that I even knew this existed. That’s a painful reminder of how much knowledge is withheld or buried in fine print, especially when we’re not asking the 'right' questions simply because we don’t know to ask them.

A loan assumption allows someone else to take over your mortgage, including your interest rate, repayment terms, and remaining balance. For FHA loans, this is permitted under specific conditions (FHA.com). The buyer must be approved by the lender and must pay the seller any equity built up in the home. For example, if I sell my home for $400,000 and owe $300,000, the buyer must cover the $100,000 difference, either in cash or through a second loan (WithRoam, 2024). Additionally, the FHA caps the loan assumption processing fee at $500 (LendingTree, 2024).

If you’re interested in finding homes with assumable mortgages, there’s a growing platform called WithRoam that helps connect buyers to properties with low-rate, assumable loans. You can explore available listings at: https://www.withroam.com

Homeownership has always been a key to building generational wealth but access to that path isn’t equal. Black and Brown families face ongoing gaps in ownership rates, access to affordable financing, and financial education. FHA loan assumptions are one of the best-kept secrets, a practical, legal, wealth-saving strategy that isn’t shared often enough in our circles.

If I could rewind time, I would have asked different questions, done deeper research, and demanded clearer answers. But what I can do now is share this knowledge so you don’t miss the opportunity I nearly did.

If you’re buying, selling, or going through a life transition like divorce, ask:
Is my loan assumable?
How much equity do I have?
What’s the process for transferring property?

Because when you tell your money what to do, you’re not just managing your finances—you’re rewriting your future.

References

Federal Reserve Bank of Philadelphia. (2024). Working Paper: Mortgage Market Disparities. https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2024/wp24-09.pdf

Mortgage News Daily. (2025). Mortgage Rates. https://www.mortgagenewsdaily.com/mortgage-rates

FHA.com. (n.d.). FHA Loan Assumption. https://www.fha.com/fha_article?id=589

WithRoam. (2024). Understanding FHA Assumable Mortgages. https://www.withroam.com/blog/understanding-fha-assumable-mortgages

LendingTree. (2024). What Is an Assumable Mortgage? https://www.lendingtree.com/home/mortgage/what-is-an-assumable-mortgage/

Buying this home during my marriage was about love and security. Today, as I navigate new chapters, I carry the lessons I’ve learned so my daughters can grow up with knowledge—and a home that reflects that.