Finance
A loan 'assumption' occurs when:
AA new borrower refinances the property with a different lender
BA buyer takes over the seller's existing mortgage obligation with lender approval✓ Correct
CA co-signer assumes responsibility for a defaulted mortgage
DA lender assumes the property through foreclosure
Explanation
A loan assumption allows the buyer to take over the seller's existing mortgage, maintaining the same interest rate, remaining balance, and loan terms. VA and FHA loans may be assumable under certain conditions. Conventional loans often have due-on-sale clauses that prevent assumption without lender approval.
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