Finance
In Georgia, an 'assumption' of an existing mortgage with lender approval is different from a 'subject to' purchase because:
AA. Both are exactly the same
BB. In an assumption with lender approval, the buyer becomes personally liable for the debt and the seller may be released✓ Correct
CC. A 'subject to' purchase requires more paperwork
DD. Only assumption requires a security deed
Explanation
With a lender-approved assumption, the buyer takes over the loan and becomes personally liable. The original borrower (seller) may be released from liability through a novation.
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Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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