Definitions for "Assumption clause"
A provision in an assumable loan that allows a buyer to assume responsibility for the seller's loan. The loan does not need to be paid in full by the original borrower (seller) upon sale or transfer of the property.
A buyer takes over the existing loan and agrees to be liable for the repayment of the loan.
The agreement between a buyer and seller, where the buyer takes on or assumes an existing mortgage on the property. This usually is done to save the purchaser money compared to his having to arrange a new mortgage. Typically mortgages do not allow for assumption unless certain conditions are complied with (called a "non-assumption" clause). Furthermore, the original borrower is still liable for the loan unless the borrower gets a release from the lender (called "novation").