Sarah takes out a mortgage on her Ohio home and makes payments for 10 years. She then sells the home. The buyer wants to take over Sarah's existing loan rather than getting a new one. In Ohio, this arrangement is called:
Correct Answer
A) An assumption of the mortgage
When a buyer takes over the seller's existing mortgage, this is called an assumption of the mortgage. In Ohio, the buyer assumes responsibility for the remaining loan payments. However, most modern conventional and FHA/VA loans contain due-on-sale clauses that require lender approval for assumptions.
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