Business Glossary

taking upon oneself the obligations of a mortgagor toward a mortgagee, generally as part of the purchase price of a parcel of real estate. By assuming the mortgage rather than taking subject to the mortgage , the purchaser becomes personally liable on the debt. The seller is not relieved of the obligation unless the lender agrees to do so in a novation . Many lenders refuse to allow mortgage loans to be assumed unless they approve of the transaction; often they require points or increase the face rate of interest.