QUOTE (loriintaiwan @ Mar 18 2008, 10:55 PM) I`m new to investing and brand new to this site, so looking for some well informed people to help me a little bit. Sorry if these are stupid questions.
I`ve been out of Canada for 5.5 years and recently I heard that the rules about assuming mortgages had changed in Alberta. Does anyone know if this is true, and if so, what`s deal? It was my understanding that all mortgages were (technically speaking) assumable in Alberta.
Also, are there other provinces where assuming mortgages is allowed and practiced?
I basically have a lot of cash but wouldn`t qualify for any mortgage with my income as it`s all from Taiwan, so I`m thinking about assuming.
Thanks in advance for any replies.
Hi LorinTaiwan,
Basically, there are still some non-qualifying assumables available in AB, but those are coming to an end. You can technically `assume` mortgages in other provinces but with difficulty and you`ll need to qualify for them, so in all practicality- no- just in Alberta.
There are other methods to go about getting a property, but you`ll hit a few walls getting your own mortgage until you start showing some income in Canada or can prove your income that you earned abroad. I know as I`ve lived abroad for 8 years too.
Some quick ideas:
Have a family member arrange the mortgage in their name for you
Do an Agreement of sale
Hunt down a non-qualifying assumable
Work with a JV Partner
Put down 35% to get a mortgage (most banks will allow this without too much proof of income). You may be able to add a 2nd on to that too.
Thanks, Todd-
Here is a cut and paste of an earlier post I wrote.
Last of the Wild and Free Alberta Assumables ?
In Alberta we`ve been blessed for a longtime time with being able to assume properties without qualifying for the mortgage. For the past two years I`ve seen banks gradually tighten up their lending policies and require buyers to `qualify` for some assumable mortgages. In essence where we take over the existing mortgage, but still need to prove our repayment ability and that our credit is in good shape.
Last June TD announced that they would cease allowing their mortgages to be assumed, and they have. A few other lenders followed suit; Rezmor and Scotia bank for example.
February 26th 2008, RBC joined up stating that they too would require full qualifying. I actually heard that as of 2/28/08 ALL Alberta lenders were required to follow suit- can anyone verify that?
But, we all knew that was coming. It has been discussed at the REIN meetings as well.
So, my question now is what other buying strategies are you finding useful in this market?
I have successfully used Agreement Of Sales in Alberta and Ontario when the market is favorable. Conventional mortgages where I qualify and JV set-ups where my partners qualify for the mortgage.
Of course, we have access to many unique strategies in REIN; perfect tenant strategy, rent-to-own, etc..
Let`s hear your insights on what is working (and what`s not) for you in Edmonton and other parts of Alberta.
PS: If you currently have deals tied up with RBC that are assumable, I believe that they will still honor them if they came in with conditions removed before 2/28.
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