"The prior buyer got a modestly lower interest rate, in exchange for being locked out of prepaying the mortgage. (He gave the lender a PUT). But, he got an option to let a new buyer assume the mortgage, provided the new buyer passed a credit check with the mortgage holder. This was an older deal, from the early 2000’s. Source:http://in.docsity.com/en-docs/Appreciated_Property_-_Real_Estate_Investment_-_Solved_Exam_ "