Assumption Clause

In Jamaica, an assumption clause in a mortgage allows a new buyer to take over the seller’s existing mortgage. This can make selling a property easier by attracting buyers who prefer to avoid the hassle of applying for a new mortgage. For buyers, assuming an existing mortgage means they bypass the typical loan application process. However, they must cover any difference between the property’s purchase price and the remaining mortgage balance. For instance, if you buy a property for J$30 million with a J$15 million mortgage balance, you’ll need to arrange the additional J$15 million. The process usually involves a transfer fee, and the mortgage must not have a due-on-sale clause, which would otherwise require immediate repayment of the full loan amount. Understanding these aspects helps ensure a smooth and cost-effective transaction.