A mortgage loan that allows a new home purchaser to undertake the obligation of the existing loan with no change in loan terms. Loans without Due-On-Sale Clauses, including most FHA and VA mortgages, are generally assumable.
Assumable Loan
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A mortgage loan that allows a new home purchaser to undertake the obligation of the loan with no change in loan terms. This is generally true of loans without Due-On-Sale Clauses. Most FHA and VA mortgages are assumable.
Example: Abel sells a home with an assumable loan to Baker. Baker takes over the payments of the loan and accepts liability under the mortgage note.
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 | Business Dictionary. Dictionary of Business Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved. Read more |
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| Real Estate Dictionary. Dictionary of Real Estate Terms. Copyright © 2004 by Barron's Educational Series, Inc. All rights reserved. Read more |
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