Assumption Desk glossary
Key terms
Desk answer
These terms come up with assumable mortgages, each with a primary source.
Last reviewed against the primary sources listed below.
- Assumption
- Taking over a seller's existing mortgage with servicer approval. Source: HUD Single Family Housing Policy Handbook 4000.1
- Equity gap
- The difference between the price and the assumed loan balance that the buyer must cover. Source: HUD Single Family Housing Policy Handbook 4000.1
- Release of liability
- Written confirmation that the original borrower is no longer responsible for the loan. Source: VA Lenders Handbook (M26-7) on KnowVA
- Due-on-sale clause
- A loan term letting the lender require full payoff if the home is sold. Source: Fannie Mae: Changing or transferring ownership of a home