Still possible to assume a mortgage in Canada?
As the title says: is it still possible to assume a mortgage in Canada? More specifically Alberta but any province will do ...
Aug 27th, 2019 10:09 pm
Aug 27th, 2019 10:45 pm
Can you share the secret of what you're hoping to accomplish by assuming someone's mortgage? You might get more useful advice with that. There's often multiple ways to skin a banana (trying to be politically correct here...)TitusBobby wrote: ↑ As the title says: is it still possible to assume a mortgage in Canada? More specifically Alberta but any province will do ...
Aug 28th, 2019 2:47 am
Hoping to get a house at a good price while saving someone from defaulting on a mortgage and ruining their credit score
Aug 28th, 2019 5:29 am
Why couldn’t someone just sell their house normally at regular price instead of giving you a deal to assume their mortgage? I guess the bonus is not getting hit by a mortgage cancellation penalty, but most people need a new home, so they’d be looking to port it over.TitusBobby wrote: ↑ Hoping to get a house at a good price while saving someone from defaulting on a mortgage and ruining their credit score
Aug 28th, 2019 1:42 pm
They wouldn't qualify for a new mortgage because the seller lost their job. This is in a market where house prices have gone down a lot in the past few years, so if they sold their house, they still would be on the hook even if they used the proceeds of the sale to pay off the balance owing.CNeufeld wrote: ↑ Why couldn’t someone just sell their house normally at regular price instead of giving you a deal to assume their mortgage? I guess the bonus is not getting hit by a mortgage cancellation penalty, but most people need a new home, so they’d be looking to port it over.
I’m not trying to be an ass or anything. But in the past, assumable mortgages were a bonus because if you got a great rate on your mortgage when you bought your house, it would be a selling point to have it assumable by the next buyer. Mortgage rates haven’t been fluctuating enough (AFAIK) to really make much of a difference, so most people would just try to negotiate their own.
Basically, I think your target seller is going to be pretty rare. But I could very well be wrong.
The one thing I did note is that the original seller can be held responsible for any shortcomings if the buyer defaults on the mortgage. In areas where property values are increasing, that’s not much of a concern. But in areas where property values are stagnant or even falling, that can be a risk that smart sellers would avoid.
https://www.darrenrobinson.ca/mortgage- ... mortgages/
C
Aug 28th, 2019 2:31 pm
I'm confused over the scenario you present. If the value of their house is less than their mortgage amount, the chances the lender will approve you assuming the mortgage is pretty limited. And why would you assume a mortgage for more than the house was worth anyways?TitusBobby wrote: ↑ They wouldn't qualify for a new mortgage because the seller lost their job. This is in a market where house prices have gone down a lot in the past few years, so if they sold their house, they still would be on the hook even if they used the proceeds of the sale to pay off the balance owing.
Basically I'm looking at ways to structure this where they get to walk away with their credit score unharmed and with more money in their pocket than if they got foreclosed while I make a little profit for my risk
Aug 28th, 2019 2:48 pm
Aug 28th, 2019 2:55 pm
I don't see why the sellers are on the hook as if they did a complete assumption of the mortgage. Their names will be removed as borrowers from the mortgage and their names removed off title. Only way this happens is if they added the buyers name and kept the sellers name but this is never advised and only happens if say a family member was taking over and needed help with income.CNeufeld wrote: ↑ I'm confused over the scenario you present. If the value of their house is less than their mortgage amount, the chances the lender will approve you assuming the mortgage is pretty limited. And why would you assume a mortgage for more than the house was worth anyways?
But one of the key problems (for them) is that if you buy the house and assume their mortgage, they are STILL on the hook for it if you turn around and walk away from the mortgage. And they would have no control over the situation.
Again, not trying to be an ass about it. Just asking questions and making observations.
C
Aug 28th, 2019 3:35 pm
I don’t see what it should be that way either, aside from the fact that the lenders like to keep their options open for collecting as much as possible. But if you google “assumed mortgage seller responsible”, you’ll find numerous links, including lawyer’s pages, RateHub, and various mortgage brokers’ sites.bomber17 wrote: ↑ I don't see why the sellers are on the hook as if they did a complete assumption of the mortgage. Their names will be removed as borrowers from the mortgage and their names removed off title. Only way this happens is if they added the buyers name and kept the sellers name but this is never advised and only happens if say a family member was taking over and needed help with income.
Aug 28th, 2019 4:00 pm
Aug 28th, 2019 5:41 pm
Aug 28th, 2019 9:21 pm
So now you want to pay your money to a jobless buyer whose on the verge of being foreclosed upon, and you’ll count on that seller to forward your payment to the lender? And if they stop doing that, they’re no worse off than they were before, but you’re out all the money that you thought was being applied on your loan... All the while paying private lender interest rates, because no A or B lender would touch this with a 10 meter pole.TitusBobby wrote: ↑ Would a wrap-around mortgage be a viable option in Canada?
Wrap-around mortgages - legal in Canada?
https://forums.redflagdeals.com/wrap-ar ... a-2309818/
Sep 6th, 2019 6:22 pm
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Sep 12th, 2019 11:59 pm
Oct 27th, 2019 7:12 pm
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