In Alberta, what is a 'vendor take-back mortgage' (VTB)?
Correct Answer
A) A financing arrangement where the seller provides a mortgage for part of the purchase price
A vendor take-back mortgage is a form of seller financing where the property seller provides a mortgage to the buyer for part of the purchase price. The seller effectively becomes the lender for that portion. This arrangement is sometimes used in Alberta, particularly for acreage or commercial properties where conventional financing may be challenging.
Why This Is the Correct Answer
Option A correctly defines a VTB as seller financing where the property seller provides a mortgage to the buyer for part of the purchase price. The seller effectively becomes the lender, registering a mortgage against the property's title. This creates a debtor-creditor relationship between buyer and seller, governed by the mortgage terms they negotiate.
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