Final answer:
Taking a property 'subject to' an existing loan means the buyer is agreeing to take over the current loan payments. The original borrower and any cosigners may still be liable if payments are not made.
Step-by-step explanation:
When a contract states that the buyer will be taking the property subject to the existing loan, it means that the buyer agrees to purchase the property and take over the payments of the existing loan. The buyer does not obtain a new loan, but instead, agrees to adhere to the terms of the loan that is already in place. This arrangement doesn't typically release the original borrower from responsibility; therefore, a cosigner on the original loan would still be liable if the new buyer defaults. Collateral, such as the property itself, might still be at risk if either the original borrower or the new buyer fails to make loan payments.