Assumption of mortgage


Assumption of mortgage

Assumption of mortgage is the purchase of mortgaged property whereby the buyer accepts liability for the debt that continues to exist. The seller remains liable to the mortgage lender (whether the lender is a commercial bank, thrift, credit union, mortgage banker or mortgage broker) unless the lender agrees to release him.

For example, a homeowner owes a 30-year mortgage loan of $250,000 against his house. A prospective buyer wants to purchase the house and keep the same mortgage. The buyer pays $50,000 cash for the equity [In real estate, "equity" refers to the interest or value that the owner has in real estate over and above the liens against it] and assumes the mortgage, becoming liable for the debt. However, the original owner remains liable as well.

Notes


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Look at other dictionaries:

  • assumption of mortgage — To take or acquire a mortgage or deed of trust from some prior holder. Thus, a purchaser may assume or take over the mortgage of the seller. Often this requires permission of the mortgagee. This is distinguishable from taking equity of redemption …   Black's law dictionary

  • assumption of mortgage — To take or acquire a mortgage or deed of trust from some prior holder. Thus, a purchaser may assume or take over the mortgage of the seller. Often this requires permission of the mortgagee. This is distinguishable from taking equity of redemption …   Black's law dictionary

  • assumption of mortgage — An agreement by the grantee of mortgaged premises to pay the debt secured by the mortgage. 37 Am J1st Mtg § 997. There is a broad and obvious distinction in the effect there of upon the rights of the parties, between the taking of mortgaged… …   Ballentine's law dictionary

  • assumption of mortgage — take over another person s mortgage payments …   English contemporary dictionary

  • assumption — I (adoption) noun acceptance, acquisition, receiving, reception, recipience, selection, taking on, undertaking associated concepts: assumpsit on quantum meruit, assumption agreement, assumption of debt, assumption of facts, assumption of… …   Law dictionary

  • assumption — The act of conceding or taking for granted. Laying claim to or taking possession of. The act or agreement of assuming or taking upon one s self. The undertaking or adoption of a debt or obligation primarily resting upon another, as where the… …   Black's law dictionary

  • assumption — The act of conceding or taking for granted. Laying claim to or taking possession of. The act or agreement of assuming or taking upon one s self. The undertaking or adoption of a debt or obligation primarily resting upon another, as where the… …   Black's law dictionary

  • mortgage — /morgaj/ A mortgage is an interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt. At common law, an estate created by a conveyance absolute in its form, but intended to secure… …   Black's law dictionary

  • mortgage — /morgaj/ A mortgage is an interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt. At common law, an estate created by a conveyance absolute in its form, but intended to secure… …   Black's law dictionary

  • assumption clause — In mortgages, a provision that the mortgage may not be assumed without written consent of mortgagee. See assumption of mortgage. Also a provision in an instrument of transfer in which the transferee agrees to assume an obligation of the… …   Black's law dictionary