An agreement between a buyer and a seller, requiring lender approval, where the buyer takes over the payments for a mortgage and accepts the liability. Assuming a loan can be advantageous for a buyer because there are no closing costs and the loan's interest rate may be lower than current market rates. Depending on what is in the mortgage or deed of trust, the lender may raise the interest rate, require the buyer to qualify for the mortgage, or not permit the buyer to assume the loan at all.
A homebuyer's agreement to take on the primary responsibility for paying an existing mortgage from a home seller.
- Browse Related Terms: A.P.R., annual percentage rate (A.P.R.), Assumption, Buy Down, Commitment Letter, Discount point, Float, Interest Accrual Rate, Truth-in-Lending Act