What is the general rule if a buyer does not assume a mortgage on a mortgaged property?

When a buyer does not assume a mortgage on a property, the general rule is that the previous homeowner remains responsible for the mortgage debt. This is because, without the buyer assuming the mortgage, the original mortgage agreement remains in effect, and the lender retains the right to pursue the original borrower—the previous homeowner—for loan repayment.

In this scenario, the buyer acquires the property subject to the existing mortgage but is not personally liable for the mortgage debt. If the buyer defaults, the lender cannot pursue the buyer for payment; instead, they can foreclose on the property while still holding the original homeowner accountable. This means the financial obligations tied to the mortgage do not transfer to the buyer unless they explicitly assume those responsibilities as part of the transaction.

Other options, such as requiring the mortgage to be paid off at closing or suggesting joint liability between the buyer and the homeowner, do not align with the typical legal framework regarding mortgage loans when a buyer does not assume responsibility. Hence, the focus remains on the original homeowner’s liability for the debt.