When a Buyer Acquires a Property Having an Existing Mortgage

question 27

Multiple Choice

When a buyer acquires a property having an existing mortgage loan, a decision must be made as to whether or not the subsequent owner of the property can preserve the loan. If the buyer does not add his or her signature to the note, the buyer does not take on any personal liability. In this case, the buyer is said to:

• A) assume the old loan
• B) purchase the property subject to the existing loan
• C) obtain the property through the use of a contract for deed.
• D) foreclose on the property

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Definitions:

Tax Structure Proposals

Recommendations or plans put forward to modify how taxes are imposed by the government, which can include changes in tax rates, bases, or the introduction of new taxes.

Pretax Income

The amount of income earned by an individual or corporation before taxes are deducted.

Benefits Principle

A taxation principle that states those who benefit from government services should pay in proportion to the amount they benefit.

Taxation

The system through which governments impose financial charges on citizens or corporates to fund public spending.