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
D) 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.
Why This Is the Correct Answer
Option D correctly identifies lender approval as the most important requirement. The buyer must formally apply to the existing lender, undergo credit assessment, and pass the mortgage stress test. The lender retains full discretion to approve or deny the assumption regardless of the buyer's willingness to make payments or the seller's agreement.
Why the Other Options Are Wrong
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An Alberta buyer wants to purchase a property for $600,000 with a down payment of $50,000. How is the minimum down payment calculated for this price?
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