FinanceQuestion 77 of 120
When a buyer takes over the seller's existing mortgage and becomes personally responsible for it, the buyer has:
a.Subordinated the loan
b.Defeased the loan
c.Assumed the loan
d.Refinanced with a new lender
Explanation
Assuming a loan means the buyer takes over the seller's existing mortgage and agrees to be personally liable for the debt. Lender approval is often required, especially with a due-on-sale clause. This differs from buying 'subject to' the mortgage, where the buyer does not assume personal liability.
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