Final answer:
The correct option is D. The seller's obligations under the existing mortgage remain unchanged.
When a buyer purchases a property subject to a seller's existing mortgage, the seller's obligations under the existing mortgage remain unchanged.
Step-by-step explanation:
When a buyer purchases a property subject to a seller's existing mortgage, the correct statement is D. The seller's obligations under the existing mortgage remain unchanged.
When a buyer purchases a property subject to a seller's existing mortgage, the buyer takes ownership of the property but does not assume any liability for the seller's mortgage. The buyer is responsible for making their own mortgage payments, separate from the seller's mortgage. The seller, on the other hand, remains responsible for the existing mortgage and any obligations associated with it, such as repayment.
For example, if the buyer defaults on their mortgage, it will not affect the seller's credit because the seller's obligations and liabilities under the mortgage are not transferred to the buyer. The buyer may obtain a separate mortgage loan to complete the purchase, but it will not become the first mortgage loan on the property. The seller's existing mortgage remains in place and the buyer's mortgage will be subordinate to it.