U.S. Mortgage Index

Assumption

Definition

An assumption is a transfer of an existing mortgage to a new borrower, if the loan documents and the holder of the loan allow it. The new borrower becomes responsible for the remaining debt.

In plain English

Most home sales use a new mortgage. An assumption, when it is allowed, lets a buyer take over the seller’s remaining loan instead of originating an entirely new one. Whether a loan can be assumed, and on what conditions, depends on the note, the investor, and the parties. This page does not say that every mortgage is assumable.

Technical definition

Consumer glossaries describe assumption as taking over another person’s mortgage. It is not a refinance and not a second mortgage.

Why it matters

Sale listings and loan documents sometimes mention assumability. Readers need the transfer idea without treating it as a standard closing path.

Sources reviewed

Important note

Assumability is loan-specific. This page does not list which programs allow assumptions.