Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.
Phonetics: as·sum·a·ble mort·gage \ə-'sümə-bəl\ \'mȯr-gij\
An assumable mortgage is one that can be taken over ("assumed") by the buyer when a home is sold. One condition of an assumable mortgage is that the lender must approve of the new home buyer. One unique risk for an assumable mortgage can exist for the seller of the home. An assumable mortgage can hold the seller liable for the loan itself even after the assumption takes place. In such a case, if the buyer were to default on the loan, this could leave the seller responsible for whatever the lender is unable to recover. To avoid this risk, sellers can release their liability in writing at the time of the assumption. An assumable mortgage could be very favorable for the buyer, if they get a lower rte with the mortgage than they would getting a new loan at market rate.Thesaurus / Related Terms