An assumption clause can be an attractive selling point for a homeowner if the interest rate on the existing mortgage is lower than current market interest rates. In addition, loan settlement costs for the buyer can be avoided. However, there are many hurdles to get over in an assumption. For example, most mortgages have due-on-sale clauses which prevent assumptions, and the remaining principal balance of the existing mortgage is likely to less than the sales price of the home.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
assumption clause — In mortgages, a provision that the mortgage may not be assumed without written consent of mortgagee. See assumption of mortgage. Also a provision in an instrument of transfer in which the transferee agrees to assume an obligation of the… … Black's law dictionary
assumption clause — A clause in a deed, lease, or other transfer of property whereby the transferee assumes some obligation of the transferrer chargeable against the property. See 37 Am J1st Mtg §§ 994, 997 … Ballentine's law dictionary
assumption — I (adoption) noun acceptance, acquisition, receiving, reception, recipience, selection, taking on, undertaking associated concepts: assumpsit on quantum meruit, assumption agreement, assumption of debt, assumption of facts, assumption of… … Law dictionary
assumption — n. 1) to make an assumption 2) an erroneous, false; implicit; reasonable; safe; valid assumption 3) an assumption about; of (to make an assumption of guilt) 4) an assumption that + clause (we all made the assumption that the new company would… … Combinatory dictionary
Closed world assumption — The closed world assumption (CWA) is the presumption that what is not currently known to be true, is false. The same name also refers to a logical formalization of this assumption by Raymond Reiter. The opposite of the closed world assumption is… … Wikipedia
Due-on-sale clause — A due on sale clause is a clause in a loan or promissory note that stipulates that the full balance may be called due upon sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to … Wikipedia
Point of total assumption — The point of total assumption (PTA) is a point on the cost line of the Profit cost curve determined by the contract elements associated with a fixed price plus incentive Firm Target (FPI)contract above which the seller effectively bears all the… … Wikipedia
Natural-born-citizen clause of the U.S. Constitution — Part of the constitutional provision as it appeared in 1787 Status as a natural born citizen of the United States is one of the eligibility requirements established in the United States Constitution for election to the office of President or Vice … Wikipedia
acceleration clause — n: a clause (as in a loan agreement) that accelerates the date of payment in full under specified circumstances (as default by the debtor) Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. acceleration clause … Law dictionary
Counterfactual conditional — For other uses, see Counterfactual (disambiguation). A counterfactual conditional, subjunctive conditional, or remote conditional, abbreviated cf, is a conditional (or if then ) statement indicating what would be the case if its antecedent were… … Wikipedia