What does an assumption require in a mortgage transaction?

In a mortgage transaction, an assumption involves a new borrower taking over the responsibility of an existing mortgage. For this process to be valid, it generally necessitates a written agreement from the lender. This requirement ensures that the lender formally consents to the transfer of the loan obligation from the original borrower to the new one. This is crucial because the lender needs to assess the new borrower's creditworthiness and ability to repay the loan, and the written agreement is the legal mechanism to facilitate this change in obligation.

Other factors, such as a credit check or proof of income, may be part of the lender's decision-making process but are not strictly required as part of the assumption itself. Additionally, while a down payment might be relevant in many mortgage transactions, it is not a requisite component for all assumptions. The primary concern during an assumption is obtaining that formal approval from the lender, making the written agreement essential for the legal transition of mortgage obligations.