Definitions for "Assumability"
Whether or not a mortgage may be transferred from the seller to new buyer, assuming the prospective buyer is deemed credit worthy by the issuing lender. A mortgage may not be assumed if it contains a due-on-sale clause.
The ability of a seller to transfer the mortgage to the new buyer. This means the mortgage is assumable. Lenders generally require credit review of the new borrower and may charge a fee for the assumption. When you are selling your home assumability can help you attract buyers.
A mortgage feature allowing the homebuyer to assume responsibility for the obligations of a mortgage made by a former owner. In most cases, assumability is not automatic and the buyer must be qualified by the lender in order to assume the mortgage.
The ability of another party to take over a borrower's obligations on a mortgage loan.