Seller Financing and Assumable Mortgages: Two Ways Around High Rates in Utah
By Michael Chase Hooper, Realtor · Serving Utah County, Salt Lake County, and northern Utah · Updated October 14, 2026
With mortgage rates above 7%, many buyers have decided to sit on the sidelines. But is waiting really the only option?
According to Freddie Mac, the average 30-year fixed rate was 7.28% on October 1, 2026, up from 6.34% a year earlier. Prices haven't fallen enough to offset that. In the second quarter of 2026, the median single-family home in Salt Lake County sold for a record $645,000, and Utah County's median was $600,000, according to the Salt Lake Board of REALTORS. Two of the most overlooked tools for buyers right now are seller financing and assumable mortgages, and both can put you in a home at a rate the bank isn't offering today.
What is seller financing?
In a seller-financed deal, the seller acts as the bank. You and the seller agree on the price, down payment, interest rate, and payment schedule, and you make your monthly payments to the seller instead of a lender. The agreement is typically documented with a promissory note and secured by a deed of trust or mortgage (in some states, a contract for deed).
Many of these deals include a balloon payment due in a few years. That gives you time to build your finances, wait for rates to improve, and refinance into a traditional loan.
What is an assumable mortgage?
With an assumable mortgage, you take over the seller's existing loan, including the interest rate and the remaining balance. If the seller locked in a low rate in 2020 or 2021, you may be able to inherit it.
Here's the catch: generally only FHA, VA, and USDA loans are assumable. Most conventional loans contain a due-on-sale clause that prevents it. You'll also need to qualify with the seller's lender, and you'll have to cover the difference between the sale price and the loan balance, which is the seller's equity. That could mean a large amount of cash at closing, or a second loan.
Why these options are worth a look...
A lower rate. An assumed loan keeps the seller's original rate, and a seller-financed deal lets you negotiate your own, rather than accepting what the market dictates.
Lower closing costs. Government-backed assumptions often come with capped fees, and some may not require a new appraisal.
More flexible terms. Sellers can be open to creative down payments, payment schedules, and timelines that a bank would never approve.
Less competition. Most buyers never ask about these options, so you may be one of very few people at the table.
Before you jump in...
Check the existing loan. If the seller still has a conventional mortgage, seller financing could trigger the due-on-sale clause. Have the seller confirm with their lender first.
Know the VA rules. A seller's VA entitlement can stay tied up when a non-veteran assumes the loan, and a VA funding fee may apply. Many sellers hesitate for that reason.
Run the numbers on the equity gap. An assumable loan only helps if you can bridge the difference between the price and the balance.
Plan for the balloon payment. Know how and when you'll refinance or pay off a seller-financed note.
Get it in writing. Work with a real estate attorney or title company, since federal and state lending rules may apply to seller-financed sales.
The homes with these options rarely show up in a typical search, so ask. Many listings don't advertise an assumable loan or a willingness to carry the note, but a seller who needs to move may be happy you brought it up.
As always, contact me for more information about seller financing and assumable mortgages. I'm happy to answer all of your questions.
About the author: Michael Chase Hooper is a Realtor helping buyers and sellers in Utah County, Salt Lake County, and surrounding northern Utah communities. (RE/MAX Associates. (801) 369-8268; HooperRealtor@gmail.com