assumption clause

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when is it necessary to include an assumption clause?

Jessica · Posted: Fri Sep 02, 2005 9:55 pm Post subject: RE:

Hi Barbara
Welcome to MortgageFit forum.

It becomes necessary to include an assumption clause in the loan document if you have planned to allow the buyer to assume the mortgage loan at the time of sale of your property.

This clause gives the buyer the responsibility of repaying the loan that was originally borrowed by the seller. But as the original borrower, you will still be liable for repaying the loan provided the buyer defaults and the lender decides to foreclose.

However, if the original borrower gets a release from the lender, then he will be relieved from the liability of repaying the loan.

Hope we have been able to guide you. For further reference, go through assumption

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Regards,
Jessica.

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