When a buyer acquires a property having an existing mortgage loan, a decision must be made as to whether or not the subsequent owner of the property can preserve the loan. If the buyer does not add his or her signature to the note, the buyer does not take on any personal liability. In this case, the buyer is said to:

Question

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When a buyer purchases a property subject to the existing loan, they do not assume any personal liability for the loan. The loan remains in the name of the original borrower, but the buyer takes over ownership of the property and is responsible for making sure the mortgage payments continue to be made. This is different than assuming the loan, which would require the buyer to become personally liable for the debt.

When a Buyer Acquires a Property Having an Existing Mortgage