Assumption

Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust. In real estate, an assumption refers to a buyer taking over the seller’s existing mortgage loan instead of obtaining a brand-new loan, meaning the buyer agrees to assume responsibility for the remaining balance, interest rate, and repayment terms of that mortgage. Assumptions can be attractive when the existing loan has a lower interest rate than current market rates, but not all mortgages are assumable, and many require lender approval to confirm the buyer qualifies. Depending on the loan terms, the seller may or may not remain liable if the buyer later defaults, so an assumption often involves additional paperwork, possible fees, and careful review to ensure both parties understand the legal and financial responsibilities involved.