Assumption of mortgage is a real estate transaction where the buyer accepts liability for the existing mortgage debt on the property, often facilitating a smoother and potentially cheaper transfer of ownership compared to obtaining a new loan.
Mortgage assumption is the process by which a homebuyer takes over the seller's existing mortgage, continuing to make payments under the original terms. This can potentially offer favorable interest rates and terms compared to current market rates.
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.
