What does "Assumable - Not due on transfer" mean?

The phrase "Assumable - Not due on transfer" indicates that the existing loan can be taken over by a new buyer when a property is sold, without requiring additional approval from the lender. This is significant because it allows the buyer to step into the existing loan agreement, inheriting the loan’s terms, interest rate, and payment schedule. This can make the property more attractive, especially if the current loan has favorable conditions compared to current market rates.

In this context, "not due on transfer" specifically points to the fact that the loan does not need to be paid off as part of the sale, allowing for a seamless transition between the seller and buyer. This feature can be particularly beneficial in a real estate market where interest rates might be rising, as the buyer can take advantage of the seller's lower interest rates without undergoing a complicated lender approval process that might involve scrutiny of their creditworthiness.

The other choices do not describe the nature of an assumable loan accurately: the first suggests a non-transferable loan, the third indicates that the loan amount changes upon transfer which isn't typical for assumable loans, and the fourth implies that the loan must be paid off in full when the property changes hands, which contradicts the idea of it being assum