What term describes a provision in a sales contract where the purchase of a property is subject to an existing mortgage?

The term that describes a provision in a sales contract indicating that the purchase of a property is subject to an existing mortgage is "subject to." This particular phrase is utilized in real estate transactions to indicate that the buyer is acquiring the property with the understanding that the current mortgage will remain in place. In such arrangements, the seller is still responsible for the mortgage payments, but the buyer takes title to the property.

This method allows buyers to leverage the existing financing without formally assuming the mortgage, meaning they do not take on the legal obligation to repay the loan. The buyer typically benefits from existing favorable mortgage terms and conditions, while sellers may find this appealing as it can facilitate the sale of the property more easily.

In contrast, the other terms listed do not accurately describe this provision. A buyer's finance contingency typically refers to a clause that allows the buyer to back out of a contract if they cannot secure financing. A lease option involves leasing the property with the option to purchase it later, which differs from purchasing a property with an existing mortgage. An assumption agreement, while related, means that the buyer is formally assuming the mortgage and becoming responsible for the outstanding loan, which is distinct from the "subject to" arrangement.