What is a clause in a mortgage contract that prevents assuming the mortgage without lender consent?

A non-assumption clause is specifically designed to prevent a borrower from transferring their mortgage obligations to another party without the lender's explicit consent. This protects the lender by ensuring that they maintain control over who is responsible for the loan, which is particularly important in assessing the creditworthiness of any potential new borrower. If the original borrower wishes to sell their property, they would need to seek the lender's approval before the mortgage can be assumed by the new buyer. This clause serves to mitigate the risk for lenders and ensures that they can review and evaluate any potential new borrower who may take over the mortgage payments.

In contrast, a transfer clause typically allows for the transfer of property but does not necessarily limit the assumption of the mortgage. An assumption clause would allow a new buyer to take over the mortgage without needing approval from the lender, while a repayment clause pertains to the schedule and terms of repaying the loan rather than the assumption of the mortgage. The identification of the right clause is crucial in understanding the terms of a mortgage agreement and the implications for both borrowers and lenders.