Assumption of Mortgage
An arrangement where the purchaser, or grantee, obtains title to real property and assumes the seller's liability for payment of an existing note secured by a mortgage ( www.practicallaw.com/0-382-3636) that encumbers the real property at the time title is transferred.
The most common reasons why a purchaser would want to assume the seller's mortgage include:
The then current mortgage interest rates are not as favorable as the interest rates of the seller's mortgage.
The purchaser can avoid local mortgage recording taxes by assuming the seller's existing mortgage.
The seller, or grantor, should negotiate with the mortgage lender to ensure its release from any liability relating to the mortgage as of the date its mortgage is assumed by the purchaser.