You are selling your home, which has a large mortgage with favourable rates. You want to know whether a new purchaser can assume this mortgage.

1. (i) Explain when assumption of a mortgage may occur, and also discuss whether you could bear any liability if the mortgage is assumed. (3 marks)

2. (ii) Would novation of the mortgage be a better idea? Explain when novation may occur, and any liability you could face. (2 marks)

(b) You are able to sell your property and now your financial advisor suggests that you should invest your new windfall in mortgages. He lists the various types of mortgages available. Discuss at least three different types of mortgages, relating their advantages and disadvantages from a legal standpoint, in particular with respect to the security involved. (5 marks)