assumable mortgage
Definition
A mortgage that can be transfered with no change in terms. If an assumable mortgage is transferred, the buyer assumes all responsibility for repayment. The original lender must agree to the transfer of an assumable mortgage. The seller should receive a written release from the original lender stating that he/she has no responsibility for further payments. The buyer may have to meet certain standards to qualify and may be charged an assumption fee. Assumable mortgages can make a property more desirable if interest rates have risen, because the new buyer's payments are at the original rate. By definition, assumable mortgages cannot have a due-on-sale clause.
Use assumable mortgage in a sentence
“ If you are going to try and get a new home or work place you may want to try and get an assumable mortgage. ”
“ In their mortgage statement it did mention the terms that would need to be met in order for there to be an assumable mortgage situation. ”
“ There is a house for sale by owner in Sandy and Bob's neighborhood and they planned to purchase the home, if it had an assumable mortgage, but the bank that held the mortgage would not allow Sandy and Bob the same interest rates and agreement. ”
