Finance
What is an 'assumable mortgage' in Delaware real estate?
AA mortgage where the lender assumes responsibility if the borrower defaults
BA mortgage that can be transferred to a new buyer, who takes over the existing loan terms — beneficial when the existing rate is lower than current market rates✓ Correct
CA mortgage that automatically adjusts to current market rates upon assumption
DA second mortgage assumed by the seller to help the buyer with the down payment
Explanation
An assumable mortgage allows a new buyer to take over (assume) the seller's existing mortgage, including its interest rate and remaining term. This is especially valuable when existing rates are lower than current market rates. FHA and VA loans are generally assumable; most conventional loans have due-on-sale clauses preventing assumption.
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