What does it mean to "Assume a Mortgage"?

To "Assume a Mortgage" means to take over the payments of an existing mortgage. This typically occurs when someone agrees to take responsibility for the outstanding debt on a property, essentially stepping into the borrower's shoes with the lender's approval. This process allows the new borrower to continue making the payments according to the existing terms of the mortgage, which can be advantageous if the mortgage has favorable terms, such as a low interest rate.

This is distinct from refinancing, which involves obtaining a new loan to pay off an existing one, often with the goal of securing a lower interest rate or changing the loan terms. It also differs from paying off a mortgage early, where the borrower intends to fully satisfy the mortgage amount ahead of schedule. Lastly, transferring a mortgage to another property is not considered "assuming" a mortgage, as it involves a different legal process and typically requires a new loan agreement for the new property. Thus, the best definition of "assuming a mortgage" is taking over the payments of an existing mortgage.