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1. novation
noun. (law) the replacement of one obligation by another by mutual agreement of both parties; usually the replacement of one of the original parties to a contract with the consent of the remaining party.
Synonyms
Etymology
- novatio (Latin)
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Sentences with novation
1. Noun, singular or mass
In the case of a mortgage loan, the current borrower and the third party willing to assume the loan as well as the lender must all agree to novation of the loan.
2. Adverb
If a lender agrees to grant you novation, you must provide income documentation to prove you can afford to pay the mortgage payments without assistance.