What does acquiring property subject to an existing mortgage mean?

Acquiring property subject to an existing mortgage means that the new buyer takes over the ownership of the property but does not assume personal liability for the existing mortgage loan. In this scenario, the original borrower remains responsible for the debt. Therefore, the new buyer does not sign the note because by doing so, they would become legally responsible for the mortgage payments. Instead, they take ownership of the property while the original mortgagor's credit remains tied to the mortgage.

This arrangement can be beneficial for buyers who may not want to incur additional debt or for those who may have difficulty securing a mortgage on their own. It also means that the lender may still have the right to call the loan due (due-on-sale clause) if they discover that the property has been sold without their consent. Thus, the situation clarifies that the new borrower is gaining control of the property but is not officially taking on the mortgage's terms and obligations.