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Assumable Loan

 
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.

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A mortgage loan that allows a new 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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Barron's Business Dictionary. Dictionary of Business Terms. Copyright © 2007 by Barron's Educational Series, Inc. All rights reserved.  Read more
Barron's Real Estate Dictionary. Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.  Read more

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