Saturday, January 6, 2007

Assumed Mortgage

In real estate an assumed mortgage occurs when a the buyer of a real property is transferred all the obligations of the seller's mortgage.
The buyer assumes all the obligations under the mortgage, just as if the loan had been made to the buyer. The major driving force behind assumptions is the lower interest rate on the assumed mortgage relative to current market rates. This method is frequently used when the buyer can not get a better interest rate then the seller currently has.

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