Assumption Fee

Lender’s charge for paperwork involved in the processing for a new buyer to assume an existing loan. An assumption fee is a charge a lender may require when a buyer assumes an existing mortgage loan from the seller, and it helps cover the lender’s administrative costs for processing the assumption. This fee is typically paid by the buyer, although it can be negotiated as part of the purchase agreement, and it may include tasks such as reviewing the buyer’s credit, verifying income, preparing new loan documents, and updating records to reflect the change in responsibility. The amount of an assumption fee varies by lender and loan type, so buyers usually request the exact fee and approval requirements early in the transaction to understand the total cost of assuming the mortgage.