What does Transferring your Mortgage mean?
You bought your dream home a few years back now, but circumstances have changed and you are considering selling your home in the middle of your mortgage term, but you’re concerned you are going to have to break your mortgage and pay a hefty penalty. Don’t fret, you may be able to port or transfer your mortgage.
Porting your mortgage means that you’d take your current mortgage – amount, rate, and terms – and transfer them to another property you have purchased. If you happen to purchase a property that is more expensive than the previous one, you’ll receive an offer from your financial lender to blend and extend your mortgage – which is the weighted average of your current mortgage and rate, combined with the money you require for your new new mortgage rate.
Not all mortgages are portable! Variable-rate mortgages are a prime example as they cannot be transferred. Also, some mortgages don’t have the option to port or transfer as the lender doesn’t allow for it.
Since you never know what changes life has in store for you, it is always better to have the port and transfer clauses available as a safety net! So you should make certain to discuss these options with your Mortgage Agent prior to signing your mortgage offer as porting can save you thousands by avoiding prepayment penalties.
What qualifies you to port your mortgage?
The lender will be the person to determine whether or not you can actually port your mortgage. In their determination, they’ll ensure you:
• Still have a stable source of income
• Have debt-to-income ratios that are acceptable
• Have a property appraisal that aligns with your borrowing request
If you fail to meet all qualifying criteria, you may not get approval, or at least may not get the full amount you are looking for. Therefore, it’s best to be in a good financial position so your lender sees you as a low-risk borrower.
For more information, or to discuss your options or other mortgage needs, please contact me at any time.
Meghan Van Houten – Mortgage Agent
416-709-9062
meghan@mountainviewmortgage.ca
Mountainview Mortgages
5038 Fairview Street, Burlington, ON L7L 0B4
Independently owned and operated
Lic# 12568
