Are Mortgages Assumable in New Brunswick? An assumable mortgage is a mortgage that allows the purchaser to take over the remaining payments and become legally responsible for the mortgage terms. For this to even become a reality, there are a few guidelines you need to follow. Not all mortgages can become assumable therefore the bank must approve the assumption as well as the person assuming the mortgage; you, as the buyer, would need to show that you have sufficient assets and credit before the bank would even consider this option; and you may need to pay a fee to the bank for the settlement of the transaction.
Is assuming your mortgage even worth it? If assuming your mortgage is something you have been considering for a while, there are a few risks that you should be made aware of before taking that final jump. Once all is said and done with the lender, they can still hold the seller personally liable for the mortgage if the buyer were to default on the loan. For example, the bank may decide to foreclose the property if they find that the selling price of the home is lower than the remaining balance on the mortgage and you as the buyer of the assumable mortgage, could be sued for the difference. However, CMHC started a new policy where if an assumption takes place and the mortgage is kept current for 12 consecutive months, the seller would no longer be liable in the event of a default, such as for the example above.
As long you are careful about assuming your mortgage, you should not have any problems. There are several advantages to an assumable mortgage. Banks often approve the assumable mortgage quicker than a new loan and settlement charges may be lower. Also, if interest rates have risen, the mortgage terms of the seller may be more appealing than a new loan.
Like mentioned before, if you are wondering Are mortgages assumable in New Brunswick? it can be a case by case basis so make sure you speak with your advisor to confirm if this is an option for you. If you have any further questions or still don’t know if mortgages assumable in New Brunswick, then give us a call at (506) 471-4210 or toll-free at 866-957-2263.