An Assumable Loan is a type of mortgage loan that allows a new purchaser to undertake the existing loan's obligation without changing its terms. This process bypasses the need for obtaining a new mortgage arrangement.
A due-on-sale clause is a provision in a mortgage agreement that requires the full repayment of the loan when the property is sold.
Mortgaged Property refers to real or personal property that has been pledged as security for the repayment of a loan. This secured asset is usually real estate property, where the borrower retains ownership while the lender holds a legal claim until the debt is repaid in full.
A nonassumption clause, also known as a due-on-sale clause, is a clause in a mortgage contract that prevents the transfer of the mortgage terms to another borrower in the event of a sale. This clause is used to protect lenders from the potential risks of new borrowers who might be less creditworthy than the original borrower.
