02 May Portable mortgage
There are several options available to you when deciding which mortgage to choose, and one of these choices is whether or not it’s important for you to be able to have a portable mortgage when you sell your home.
Quite simply, a portable mortgage is a mortgage that permits the mortgage borrower to transfer the mortgage balance to a new property and with the same lender without penalties. One reason you would opt for this type of mortgage is if you have a great interest rate and want to keep it for the duration of your term.
Besides the low rates, there are several advantages for the homeowner to choose this mortgage. Prepayment penalties can be harsh, up to 3 monthly payments or the cost of increased interest in the remaining term of the mortgage. Over time, these amounts can represent thousands of dollars. In addition, many of the costs associated with obtaining a new mortgage might not be charged. However, it is important to remember that you may get an appraisal fee for the new property, as the mortgage lender must be assured that the loan-to-value ratio meets their requirements.
Last, but definitely not least, it is important to remember that you must qualify. Just because you want a portable mortgage doesn’t automatically mean that you can, especially if you’re getting a bigger mortgage than you had before. The lender still needs to verity that you still have a source of income, and that your debt ratios are within their levels, as well as. Looking at the new property to make sure that the appraisal matches the additional amount that the homeowner wants to borrow.