How does 'Assumption of Mortgage' work for heirs?
An assumption allow the heir to take over the existing mortgage debt and legal title of the property.
Lenders typically still require the heir to 'qualify' for the debt under current B-20 rules, though some lenders allow a 'simple' assumption with no qualification if there is significant equity. If not qualifying, a full refinance is required. Heirs should check if the mortgage is 'transferable' in the original commitment document.
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Related Questions
How do you structure a 95% LTV refinance for a buyout?
Technically, this is structured as a 'Purchase' from one spouse to another, which is why it qualifies for 95% LTV (insured) instead of the 80% (conventional) refinance cap.
What are the core 2026 documentation requirements?
Lenders will not touch a buyout file without a final, signed Separation Agreement.
Can a spousal-buyout borrower use the first-time buyer 30-year amortization?
A spousal buyout does not by itself create first-time buyer status. Insured 30-year amortization is available only when that borrower meets the first-time buyer test, or the home is newly built, under CMHC Home Start.
What is the biggest risk in a spousal buyout file?
The single most common failure point is the 'Income Gap.' Most families qualify for their home on two incomes; qualifying on one income while paying support is extremely difficult under the stress test.