Billy Bob briefly considered and then rejected a deal because of the “obvious” undesirable (to the borrower) terms embedded in the assumable mortgage on the property. That undesirable nature of the mortgage was a direct function of two options exchanged at closing between a prior buyer of the property and the existing mortgage holder. What are those two options? Be precise. (Answer?)?

We have formed a society in our  college council where we provide e-resources to our subscribers related to exam material. I personally thought of including this question in it as well, because it is often tested in our exams. Please elaborate it.

Answers (6)

somit 09-05-2013
somit - Ambedkar University, Delhi
"The prior buyer got a modestly lower interest rate, in exchange for being locked out of prepaying the mortgage. (He gave the lender a PUT). But, he got an option to let a new buyer assume the mortgage, provided the new buyer passed a credit check with the mortgage holder. This was an older deal, from the early 2000’s. Source: "
shamir_69 13-05-2013
shamir_69 - Bidhan Chandra Krishi Viswa Vidyalaya
Easily perceived or understood; clear, self-evident, or apparent  

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