Final Answer:
When buying a property, you acquire ownership with a new mortgage, while assuming an existing mortgage means taking over the seller's loan obligations.
Purchasing subject to an existing mortgage involves buying the property without assuming liability for the seller's mortgage.
Step-by-step explanation:
Buying Property with New Mortgage:
In this scenario, a buyer secures a new mortgage to purchase the property. The buyer becomes the legal owner, and the new mortgage is typically based on the property's current market value and the buyer's financial standing.
Assuming an Existing Mortgage:
Assuming an existing mortgage involves the buyer taking over the seller's mortgage. The buyer assumes responsibility for the remaining loan balance, interest rate, and other terms. This process is subject to lender approval, and the buyer's creditworthiness may influence the decision.
Buying Subject to an Existing Mortgage:
When buying subject to an existing mortgage, the buyer acquires the property without formally assuming the seller's mortgage. The original borrower remains responsible for the loan, and the buyer takes ownership subject to the existing financing. This method may be advantageous if the existing mortgage terms are favorable.
Explanation for Each Part:
Buying Property with New Mortgage:
This option is true when a buyer secures a new mortgage to acquire ownership. The buyer is responsible for a new loan, distinct from any existing mortgages on the property.
Assuming an Existing Mortgage:
This option is not true. Assuming an existing mortgage means taking over the seller's loan, which is different from acquiring a new mortgage.
Buying Subject to an Existing Mortgage:
This option is true when a buyer purchases a property without formally assuming the seller's mortgage, allowing the original borrower to retain responsibility for the loan.