What happens if the buyer does not meet the obligations associated with a loan assumption?

When a buyer assumes a loan as part of a real estate purchase, they are taking on the responsibility of the existing mortgage obligations. If the buyer fails to meet these obligations, such as making timely payments or adhering to the terms of the loan, it creates a breach of the contract.

In this context, the seller has the right to terminate the contract due to the buyer's default. The seller relies on the buyer's ability to assume and fulfill the loan requirements, and any failure to uphold those obligations affects the seller's interests. This legal right serves to protect the seller from potential financial loss and ensures that the transaction proceeds smoothly.

The other options do not reflect the standard practices associated with loan assumptions in real estate transactions. For instance, requiring the buyer to provide additional collateral or assuming responsibility for the payments does not typically align with the legal recourse available to sellers in such situations, as they are not obligated to absorb the financial impact of the buyer’s failure to comply with loan terms.