Mortgage Assumptions and Ongoing Liabilities....

A buyer of a property may wish to finance the purchase by way of assuming the mortgage financing. It must be determined if the mortgage is assumable or not.

What is the liablity to the Seller after closing with respect to the assumsed mortgage?

Under the terms of the mortgage, the Mortgagee(lender) is entitled to look to the convenant of the Seller if there is default.

Therefore it is important to provide the Seller with a means of release from the ongoing liabilites associated with an assumed mortgage.

There are two ways to release the Seller from his/her convenant....

1. Consent to assumption - all parties accept the assumption by the Buyer from the Seller...

2. Novation - This is operation of law... If it can be determined that the Mortgagee, the Buyer and the Seller had all the relevant facts and the Mortgagee accepted the Buyer as principal borrower and accepted the new mortgage in full satisfaction of the old mortgage, then a defence of Novation can be raised....

Why is this important to you?? If you have an interest in property, are looking to sell, and have an assumable mortgage then this information should be considered.

Arran McLellan

250.884.3980

As many of you may know, we are transitioning back to the old GST/PST system.
This is expected to be completed by MARCH 31,2013This means the the
affordability of homes and fees for other services will be exempt from the 7%
PST and will be subject to the 5% GST. This will result in more demand
for new homes which will help stimulate the local economy.Months of Inventory - The number of months to
sell all the inventory at current sales levels.... why care? Currently we are at 6 months... What this means
is that it will take 6 months to sell the current inventory.... As the
months of inventory is increasing = more sellers and less buyers = buyers market
as more product is on the market.Here is a link to the last 2 years of
Months of Inventory levels.... http://www.victoriamls.ca/matrix/public
... 9600075664