Definition - What does Assumable Mortgage mean?
An assumable mortgage is a mortgage where the seller of a house transfers his or her remaining mortgage to the buyer of a house. So, once the buyer of the house gets legal ownership of the house, he or she simply continues to pay the mortgage that the previous owner was paying. Legally speaking, the new owner has the full responsibility to pay the mortgage once it is transferred to him or her.
Justipedia explains Assumable Mortgage
The benefit of an assumable mortgage is that the buyer doesn't have to go shopping for a brand new mortgage. So, essentially these types of mortgages can save a lot of time and effort. However, the buyer must make sure that he or she likes the terms of the assumable mortgage. If not, then it may be better for the buyer to simply go and purchase a brand new mortgage. The interest rates and the payment amounts will determine the compatibility for the buyer with the assumable mortgage.