An Alberta seller has an existing mortgage with a below-market interest rate. The buyer wants to assume the mortgage. What is the MOST important requirement for mortgage assumption?
Correct Answer
B) The buyer must qualify with and receive approval from the existing lender to assume the mortgage
Mortgage assumption requires the buyer to apply to and be approved by the existing lender. The buyer must meet the lender's qualification criteria, including the mortgage stress test. The lender has the right to refuse the assumption if the buyer does not qualify. Not all mortgages are assumable — it depends on the mortgage terms.
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