What is the fee called that is paid to a lender when a mortgage assumption occurs?

The fee paid to a lender when a mortgage assumption occurs is known as the assumption fee. This fee is charged by the lender for processing the transfer of the mortgage from the original borrower to the new borrower who wishes to assume the loan. When a mortgage is assumed, the new borrower takes over the mortgage payments and becomes responsible for the loan under the existing terms. The lender's involvement in this process requires evaluation and documentation, which justifies the assessment of the assumption fee.

Understanding this fee is important for both buyers and sellers in a real estate transaction involving an assumable mortgage. It can impact overall transaction costs and should be factored into the financial analysis when considering taking over a mortgage. The other terms listed, like transfer fee, loan processing fee, and credit review fee, do not specifically relate to the act of assuming a mortgage and are used in different contexts within mortgage financing.