(1.) The legal and binding action of assuming a previous borrower's obligation of a loan. Someone may decide to assume a loan if the lender agrees not to change the terms of the loan, and thus have them remain beneficial to the new owner. Unless the lender also agrees, however, the seller remains liable for the mortgage.

(2.) By assuming the mortgage the purchaser becomes personally liable on the debt. The seller is not relieved of the obligation unless the lender agrees to do so by substituting the old obligation for a new one. Many lenders refuse to allow mortgage loans to be assumed unless they approve of the transaction; often requiring points or increasing the face rate of interest.