Alberta Real Estate Licensing Exam Practice · Question
A seller in Red Deer agrees to provide a vendor take-back mortgage amounting to $50,000 as part of the financing for their property valued at $450,000. The buyer has a first mortgage for $350,000. What is the total equity the buyer has in the property after accounting for both mortgages?
The buyer's equity is calculated as the property value minus the total outstanding mortgage debt. Here, the equity is $450,000 (value) - ($350,000 (first mortga
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Question: A seller in Red Deer agrees to provide a vendor take-back mortgage amounting to $50,000 as part of the financing for their property valued at $450,000. The buyer has a first mortgage for $350,000. What is the total equity the buyer has in the property after accounting for both mortgages?
Answer options:
- $0 ✅ $50,000
- $350,000
- $400,000
Correct answer: $50,000
Explanation: The buyer's equity is calculated as the property value minus the total outstanding mortgage debt. Here, the equity is $450,000 (value) - ($350,000 (first mortgage) + $50,000 (vendor take-back mortgage)) = $50,000.
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