Contracts
What is 'assumption of mortgage' in a Rhode Island real estate sale?
AThe buyer takes over the existing mortgage with the lender's approval, taking responsibility for payments✓ Correct
BThe seller assumes the buyer's new mortgage
CThe buyer assumes the seller's existing home equity line
DThe lender assumes the risk of the loan
Explanation
Assumption of mortgage occurs when a buyer takes over the seller's existing mortgage—accepting responsibility for the loan balance and payments. The lender must approve the assumption for it to release the seller from liability.
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