Which of the following best describes a mortgage assumption?

A mortgage assumption occurs when a new borrower takes over the existing mortgage from the original borrower, effectively transferring the liability of the loan. This means that the new borrower becomes responsible for the mortgage payments and obligations under the loan agreement, while the original borrower is released from those responsibilities. This arrangement can be beneficial in scenarios where the existing mortgage has favorable terms, such as a lower interest rate, making it an attractive option for the new borrower.

The other choices include scenarios that do not accurately reflect the concept of mortgage assumption. Refinancing refers to the process of obtaining a new loan to pay off the existing loan, potentially with different terms, which does not involve taking over the original mortgage. Obtaining a second mortgage involves taking out an additional loan against the property, which does not transfer liability from one borrower to another. Seller financing is a method where the seller provides financing directly to the buyer, rather than through a traditional lender, which again does not involve assuming an existing mortgage.