Relocating or moving to a new home?
Have you considered PORTING your Mortgage?
PORTING your mortgage and/or PORTING your default insurance premium (CMHC, Genworth or Canada Guaranty) can save you THOUSANDS of $$$.
Most mortgages are portable, which means if your current house has sold, you do have the option to PORT your mortgage to a new home purchase. You would only do this if it is advantageous to you, eg. you will saving money in interest or save money by avoiding the payout penalty on your current mortgage. If it is not advantageous to PORT your mortgage, because you would not save interest or save money by doing this, then you can payout your current mortgage with the sale proceeds and any applicable penalty and get an entirely new mortgage on the new home.
Keep in mind PORTING your mortgage also requires that you re-qualify, eg. you will have to have to provide income verification in your new location, eg. employment letter, paystub, confirmation you've passed any required probationary period. Also, there is a time period in which you can PORT your mortgage, eg. once the current house is sold you have between 30-60 days to port your existing mortgage (eg. take a new mortgage and receive a refund of your mortgage penalty).
I can help you to determine which option is best for you, and there are a lot of details involved. Some of the things we would need to work through are the following:
- Should I port my current mortgage, or pay it out and get a newmortgage? Will you be paying a penalty on your current mortgage? What isthe estimated payout penalty?
- Can I also port my default insurance premium that I paid when Ipurchased my home (CMHC, Genworth or Canada Guaranty), or will I have topay the default insurance premium again on my new purchase?
- How much can I sell my house for (I can refer you to a greatrealtor)? How much equity will you estimate you will have from your homesale? How much down payment would you have to put on new home purchase?eg. sale price - mortgage balance - mortgage penalty if applicable - realestate fees - lawyer fees) = down payment for new home purchase
- Have you considered keeping your existing home as rental property?Can you qualify to do that? If you want to consider this do you have adown payment for the new purchase in savings (separate from the equity inyour existing home)?
- Will you require bridge financing? eg. if your possession date forthe new home is before the closing date on your sale property, you willrequire bridge (interim) financing.
- Do you have the funds for a deposit on your new purchase before youreceive the proceeds from the sale of your current house?
- What other costs should I consider, eg. moving costs, insurance,legal fees etc.
Once you have an idea of your payout penalty on the current mortgage, and you have and you have a new job line up or an idea of what your new job (income) might look like, I can do a pre-approval for you on a new home purchase.
Please let me know if you have any questions and when you are ready to talk about getting a pre-approval in place.