CMHC mortgage assumptions

[chadnixon]

Has anyone gone through this process of having a mortgage assumed with CMHC insurance. I will be the seller.

Just looking to bounce some questions of someone who has some real detailed knowledge on this subject.

[project240]

I'm assuming you put down under 20% when you purchased?

Assuming you did, if the new buyer defaults, it will come back to you... This is what we were told by our realtor and he strongly advised us against it.

[chadnixon]

Yes we did. From what I can tell reading on-line is that your only really on the hook for the first year, after that you can apply for a release of covenant from CMHC to remove yourself from the loan. This can only be done after 12 month payments made by the new buyer. However, it also seems like it says that if the new buyer qualifies with CMHC and the bank it can be transferred right away?

Not much info on CMHC web site regarding this topic

We spent way to much, put a little down, market crashed, were locked in for 3 more years, and had our income cut in half. Can't afford to keep it, can't afford to sell it. With penalties, were about 40g upside down (based on a realistic selling price)

Any other ideas?

[OU812]

tough it out.......add roomates to off set costs......rental?

[chadnixon]

Can't. Only have one spare room which will be occupied in 4 short months by our new baby.

We have been roughing it for a while. The fact that were looking into mortgage assumptions shows how desperate we are

[OU812]

What area is the house in? How much is the monthly payment?

[chadnixon]

Sylvan lake. 960 bi weekly

[OU812]

Dont know the area, if you were to move out could you rent the house by the room to meet close to your monthly payment?

[chadnixon]

Not sure what rental prices are like.

It's just west of red deer

[Team_Mclaren]

Sorry I'm a little confuse here, since you are over 40k down the hole by selling, I assume the outstanding mtg balance is higher than the market price? If so, why would anyone want to assume your mortgage?

[Xtrema]

Originally posted by Team_Mclaren
Sorry I'm a little confuse here, since you are over 40k down the hole by selling, I assume the outstanding mtg balance is higher than the market price? If so, why would anyone want to assume your mortgage?

Exactly my thought. Especially rate is currently at all time low, compare to 2 years ago (assuming you are locked in for 5 years).

And your mortgage payment come out to be around $2080 a month, add property tax on top, there is no way you and fetch enough rent to cover that.

[chadnixon]

The current Price we could fetch for our house is pretty much what we owe if we sold it. We would break even at just that. The 40 grand is what we figure we would rack up in penelties (25g), and real estate fees. That's why selling is out of the option. Someone walking into a assumption would be taking over the principle for roughly the market value.

[chadnixon]

If we get a new mortgage the only way the fees don't apply is if we port it back into a higher amount, which is the exact thing we don't want to do. I have done a fair bit of research on the subject and selling to downgrade is almost impossible. You cannot port down.