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If you are considering listing your home for sale in the near future then there are some things that you need to know.
You may think that your first call should be to a realtor, but it should really be to a mortgage broker – not your mortgage lender, but a mortgage broker.
Why?
A mortgage broker is going to give you unbiased advice and has many options available to ensure that the financing process goes smoothly for your planned move.
You may not fully understand the limitations and conditions of your current mortgage:
- Is it portable to a new property?
- What are the potential interest penalties?
- Do you need to re-qualify for financing?
- What costs are involved?
- Does the mortgage still fit your current circumstances?
- What happens if you want to buy a new home before your current home is sold?
Here is some information to consider and questions to ask.
- Not all mortgages are portable such as variable rate mortgages and Home Equity Lines of Credit. Other conditions on your mortgage may also prevent you from moving it to a new property. Many low-rate or no-frills mortgage products are not portable.
- The timing of the sale of your home may affect the amount of interest penalties being charged. The anniversary date of your fixed term mortgage will determine the amount of the interest penalty. Waiting a couple of months could significantly reduce your potential penalties. If the purchase of your new home does not line up with the sale of your current home you will still have to pay the penalties to your lender upfront and the amount will be credited back to you upon closing of your new purchase.
- You may understand that your current mortgage is portable but did you know that you will most likely have to re-qualify for financing to be able to move your mortgage to a new property. Has your overall debt or employment status changed since you originally qualified for your mortgage? It’s possible you may not qualify with your current lender.
- Discharge fees and re-investment fees may be charged by your current mortgage lender. Are you aware of the potential costs to either payout or move your current mortgage? There can be times where there may not be sufficient proceeds to provide clear title to your home.
- If you find a new home before your current home sells do you have sufficient funds available to cover the required deposit? Will you qualify to carry two mortgages or bridge financing?
An experienced mortgage broker can review all of the above with you to ensure that the sale of your home goes smoothly with no unexpected surprises.
We can calculate penalties, discuss options for bridge financing as that is not available with all lenders, provide an option for deposit funds and check the mortgage market to make sure you have the right mortgage with the best rates, terms and conditions for your current circumstances.
We will complete a full review so you can move to your next home with ease.
If you have any questions please reach out to me by phone at 888-561-2679 or email [email protected]
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
