Worried about a pending mortgage while thinking of switching homes? Port them, and you will not regret it. Porting a mortgage is possible to transfer your mortgage from your current house to the new property. It is advantageous when you have early repayment charges on the current mortgage. Doing this will help you avoid paying penalties. Let’s find out more about the early repayment charges and exit fees in detail here.
Porting Your Mortgage Explained
Imagine you invested in a house a few years ago. A day comes when you find a better place and want to sell your current home. If you are in the middle of a mortgage period, you need not break it. Instead, you can port your mortgage from your existing one along with the current rate to the new property. However, it is permissible only when you buy a new property and plan to sell the old one.
Unlike mortgage refinancing, porting will not want you to pay prepayment penalties. There will be times when the mortgage value for the new property will be more. It is a common scenario, and the lender will offer a blend or extend during such instances. A blend is an average of the interest rate, existing mortgage, and required amount for the new mortgage.
Porting a mortgage is beneficial when the mortgage rate is less than the amount offered by the lender. But if the mortgage rate is lower than what you already have, it is not advantageous to port. To access these lower rates, you will have to refinance your mortgage. On the other hand, if you were to start a new mortgage from scratch, your blended rate would end up being lower. So, analyze and check on the penalty charges to break your mortgage and decide when and how to make a move.
Factors To Consider While Porting A Mortgage
- You have to provide your income amount, job status and get qualified one more time. A re-evaluation of your credit and financial standing will be mandatory.
- Porting a mortgage at the same price is not possible. The difference has to be compensated in terms of huge down payments and higher rates of loan money.
- You will have to bear the fees like porting charges and appraisal for the new home.
Intricate Details On Porting Any Mortgage
You will not be able to port all your mortgages. The most variable-rate mortgages cannot be ported. At the same time, only certain lenders will permit mortgage porting. Consult a mortgage broker to find out the lenders who will let you port. The important information on lender details is highly vital for planning to port any mortgage.
Furthermore, the time limit to complete the porting will be between 30 to 120 days. Again, this varies from one lender to the other. A 120-day period is sufficient to complete the sale and purchase, whereas 30 days will be crucial.
Porting a mortgage is certainly gaining popularity. But it is a process that requires more groundwork. You must be familiar with the terms and conditions and get yourself involved to benefit from it.