What term describes when a buyer assumes and agrees to pay the seller's existing mortgage?

The term that describes when a buyer assumes and agrees to pay the seller's existing mortgage is "loan assumption." This process allows the buyer to take over the seller’s mortgage obligations, meaning the buyer will continue making the payments on the existing loan rather than obtaining a new mortgage. This can be beneficial for both parties: the seller can transfer their debt to the buyer, and the buyer may secure a mortgage at a more favorable interest rate that was locked in by the seller.

In contrast, seller liability refers to the obligations the seller has under the contract and is unrelated to the assumption of the mortgage. Seller lien typically refers to a legal claim against the property to secure repayment of a debt, which does not accurately describe the process of a buyer taking over a mortgage. Credit approval involves the lender's assessment of the buyer's creditworthiness before granting a new loan, again not pertaining to the direct mechanism of a buyer assuming an existing mortgage. Therefore, "loan assumption" is the most precise terminology for the situation described in the question.