WASHINGTON (TND) — With inflation pushing up prices for everyday items and mortgage rates as high as 7%, many Americans are looking for deals like assumable mortgages.

An assumable mortgage effectively passes a homeowner’s current loan to the buyer, allowing the buyer to hold a mortgage with a lower rate than today’s rate. The buyer would still need to pay the difference between the remaining loan amount and the home’s sale price, perhaps even by taking out another mortgage, but holding even part of the loan at a lower rate can help make a housing payment more manageable," per Realtor.com.

Danielle Hale, Realtor.com's chief economist, said most government mortgage loans like VA, FHA, and USDA are assumable with conditions. She also said one in four mortgage loans over the past five years were assumable government loans.

"A real benefit in today's environment where the mortgage rate on an outstanding loan is likely much lower, perhaps even half the mortgage rate that consumers would find in the market today."

According to Freddie Mac, the current average mortgage rate is at 6.88%. Just a few years ago, those rates were below 3%.

"It's not necessarily a cakewalk," Hale admitted. "There are lots of steps to jump through and go through, but for some buyers, it can be a big difference maker, and it may be worth the hassle."

Greg McBride, CFA, the Chief Financial Analyst at Bankrate disclosed some other disadvantages of assumable mortgages.

"Lenders aren't wild about processing assumable mortgages, it's much more profitable for them to initiate or originate a new loan as opposed to processing an assumable loan," he explained. "If there are slowdowns or hiccups in the process, you know, that could be something that jeopardizes the transaction itself."

Even if you're able to then assume the loan, the other problem becomes compensating the home seller for their accumulated equity, he added. "So that either means another loan at a higher interest rate or a whole lot of cash and that often becomes a stumbling block or an outright barrier to executing.

According to Bankrate, for FHA assumable mortgages, you’ll need to be able to make a minimum down payment of 3.5 percent with a credit score of at least 580 and to assume a USDA loan, you typically need a minimum credit score of 620.

Ashley Phillips told TND in February that high food and rent prices and student loan payments blocked her from owning a home.

"It is very high on my priority list to pay back the loans because it is a barrier to homeownership," she said. "Some of the the extras are definitely having to pull back on just so that I can comfortably meet the basic needs and also put some away and savings toward home purchase in the future."

Prospective homebuyers like Phillips might turn to assumable mortgages for a more affordable homeownership option.