What is mortgage assumption in the context of an Alberta real estate transaction?
Correct Answer
B) When the buyer takes over the seller's mortgage and its terms and rate, with lender approval
Mortgage assumption occurs when the buyer takes over the seller's existing mortgage, subject to lender approval. The buyer assumes the remaining balance, interest rate, and terms. This can be advantageous in Alberta when existing mortgage rates are lower than current market rates.
Why This Is the Correct Answer
Option B correctly defines mortgage assumption as the buyer taking over the seller's existing mortgage with lender approval, maintaining the original terms and interest rate. Under Alberta lending practices and Canadian federal banking regulations, the lender must consent to the transfer and the new borrower must qualify under the existing mortgage contract terms.
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