Under what condition can a mortgage be assumed by a new buyer?

The correct answer is that a mortgage can be assumed by a new buyer when noted in the mortgage contract. This means that the terms outlined in the mortgage agreement are crucial; they dictate whether assumption is permissible. A mortgage assumption allows a buyer to take over the seller's existing mortgage under the same terms and conditions, which can be beneficial to the buyer if the original mortgage has favorable interest rates or terms.

If the mortgage contract specifically states that the loan is assumable, then the new buyer has the right to assume the mortgage without needing to negotiate new financing. This provision balances the ability of buyers to take over existing loans with the lender's interest in maintaining control over who is responsible for repayment.

Other options, while related to the assumption process, do not provide the same clarity. Federal law may involve regulations regarding certain types of loans, but it does not universally allow assumptions without contractual language. Qualification by the buyer could be important in some cases, but it is a separate aspect that does not inherently grant the right to assume a mortgage without the contract stipulation. Approval by the seller could be necessary in other scenarios, especially in non-assumable loans, but it is not the fundamental condition for assumption defined by the contract.