What is the term for the act of acquiring title to a property while agreeing to be personally liable for the mortgage?

The act of acquiring title to a property while agreeing to be personally liable for the mortgage is known as loan assumption. This process involves the buyer taking over the seller's existing mortgage obligations, effectively stepping into the seller's position with regard to the loan. In doing so, the buyer becomes responsible for the mortgage payments and is personally liable for the debt if they fail to pay.

Loan assumption is significant in real estate transactions because it allows buyers to take advantage of existing mortgage terms and potentially lower interest rates compared to current market rates. Moreover, the lender typically needs to approve this arrangement, as they want to ensure that the new borrower meets their qualification criteria.

In contrast, the other choices pertain to different aspects of real estate transactions. "Subject to a mortgage sale" refers to a situation where a buyer takes over a property without formally assuming the mortgage, leaving the original borrower liable. "Free and clear cash sale" indicates a transaction where the property is sold without any existing mortgage debt, and "satisfaction of mortgage" refers to the official release of a mortgage once the debt has been fully paid off. Understanding these distinctions is crucial for navigating real estate transactions successfully.