Читать книгу Complete Home Buyer's Guide For Canada - Geraldine Santiago - Страница 10

An assumable mortgage can benefit both the buyer and the seller.

An assumable mortgage allows buyers to assume the mortgage on the property they would like to purchase. Typically, a vendor will already have a mortgage on the home that you want to buy. Instead of going through the process of obtaining another mortgage, you can sometimes assume the existing mortgage from the vendor.

When you assume the vendor’s mortgage, you continue making the monthly payments at the same interest rate as the vendor has, for the remaining term of the mortgage. You will still need the lender’s approval, and you will have to pass a credit check, just as you would if you applied for a new mortgage.

When interest rates are high, you may assume a mortgage that the vendor had obtained several years earlier, when interest rates were lower. By assuming the mortgage, you may also be helping the vendor, because he or she can pass the mortgage along to you instead of repaying the lender. Most lenders charge a penalty if a borrower repays a mortgage before its term expires. Some of the money that the vendor saves by avoiding this penalty can be deducted from the price of the home.