What is it called when a lender agrees in writing to accept a different consumer as a primary borrower on an existing mortgage?

When a lender agrees in writing to accept a different consumer as a primary borrower on an existing mortgage, this is referred to as an assumption. In the context of mortgage loans, an assumption allows a new borrower to take over the mortgage obligations of the existing borrower, enabling them to benefit from the original terms and conditions of the loan. This practice can be advantageous for the new borrower, especially if the interest rates have increased since the original loan was taken out.

The process typically requires the lender's approval to ensure the new borrower meets the necessary creditworthiness standards. Additionally, the original borrower may be released from liability, depending on the specific terms of the assumption. Understanding this concept is vital for both lenders and borrowers, especially in real estate transactions.

Points refers to upfront fees paid to lower the interest rate on a mortgage. Redisclosure typically relates to the requirement to provide updated loan disclosures to consumers under certain conditions. APR, or Annual Percentage Rate, represents the total annual cost of borrowing expressed as a percentage. Each of these terms plays a role in the lending process, but none pertains specifically to the act of transferring primary borrower status between individuals on existing loans.