Definition - What does Assumption Clause mean?
An assumption clause is a clause found in some mortgages that allow the borrower to sell the property and transfer the mortgage to a different buyer under the same terms that were given to the original borrower. By allowing an assumption clause, the mortgage contract is open for transfer, which is not always legally allowed.
Justipedia explains Assumption Clause
If an assumption clause is included in a mortgage, then the borrower does not have to seek special permission from the lender before transferring the debt to another person. The person that the mortgage is transferred to would have to register their new interest in the property and would be held to the same terms that the original borrower was held to.
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