Common Contracts
1 similar Debt Assumption Agreement contracts
What is a debt assumption agreementDebt Assumption Agreement • July 16th, 2023
Updated March 7, 2022In real estate transactions, an assumption agreement allows a third party to “assume” or take over the loan of the property’s seller.Mortgages may be assumed when the house is sold, a divorcing spouse is awarded the property in a settlement or when someone inherits property.Related LinksBridge loanEquityDeedSuch agreements are more common when interest rates are high because they offer the buyer the lower monthly payments the seller locked in when purchasing the property.Not all mortgages offer an assumption option—indeed, they generally have a “due-on-sale” clause that says that when the property is transferred to another buyer the loan becomes due and payable to the mortgage holder in full.But conventional and government-backed loans, including those issued by the Federal Housing Administration, the Department of Veterans Affairs and the U.S. Department of Agriculture, allow such transfers. (In the case of the Veterans Affairs, assumption agreements are only allo
