Dealing with questions on mortgage portability

Do you have a mortgage on your existing home and you’re thinking of moving? There are some things you first need to consider.

The importance of accurate and detailed answers around questions of the portability of your existing mortgage is vital prior to taking the first step to listing your property in order to move to a new one. All too often a cursory phone call is made directly to the lender to inquire, ‘Is our mortgage portable’ and often the answer to that question is delivered in a simple ‘yes’.

However there is more to this answer, and a detailed conversation with your unbiased mortgage professional can possibly save you thousands.

Although nearly all mortgages are portable, the key point often missing from the one word answer is that a borrower MUST re-qualify for that mortgage.

It is treated like a brand new mortgage application and underwritten according to current lending guidelines. Guidelines may have changed significantly since the original mortgage was approved.

A renewal is a simple process with limited paperwork required while porting a mortgage to a new property is essentially starting from square one. Getting to know all of the facts beforehand can eliminate some of avoidable stresses.

There are also variations around lender process which require greater clarity, few lenders will allow the porting of a variable rate discount, yet the prepayment penalty itself can still be recovered up to 12 months later in some instances.

The key is that a mortgage of equal size or greater and an equal (net) rate or higher is registered. Should a mortgage of a lower size be taken then the penalty is pro-rated. There are many ways to avoid a penalty with the right assistance navigating policies.

Knowing fully how your mortgage operates is of vital importance to avoid unnecessary costs to you and your family’s financial well-being.

Jean-Guy Turcotte is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.

Just Posted

Tom Pyper’s life on the South Saskatchewan Pipeline

Red Deer man looks back on his time working on the Cantuar pump station

Central Alberta Theatre is gearing up to present Neil LaBute’s Some Girl(s)

Opening night is April 20th with shows running through to May 5th.

Burman U prof publishes international development book

The Development Trap: How Thinking Big Fails the Poor looks to challenge perceptions

WATCH: Check out this week’s What’s Up Wednesday

A weekly recap of the week in news

WATCH: Red Deerian receives award for aiding RCMP officer in arrest

Lonnie Amundson, rugby player, tackled a fleeing suspect to help ailing officer

WATCH: Red Deer’s latest ‘Ghost’ statue unveiled at Servus Arena

‘The Face-off’ is the 11th ‘Ghost’ in the notable bronze series

Lance Armstrong settles $100M lawsuit with U.S. government

Disgraced cyclist reached $5-million settlement with sponsor U.S. Postal Service

Black Press Media acquires two new Alaska newspapers

New Media Investment Group to acquire the Akron (OH) Beacon Journal while Black Press Media takes on daily newspapers in Juneau and Kenai Alaska

UPDATE: No charges in found horses near Bentley

Responding Ponoka veterinarian says horses were in healthy condition.

Men arrested at Starbucks say they feared for their lives

Rashon Nelson and Donte Robinson were arrested in a Philadelphia Starbucks, becoming viral video

Did a Canadian shoot down the Red Baron? A century later, debate hasn’t quit

Om April 21, 1918 two Canadians in their canvas-covered Sopwith Camel biplanes engaged the enemy

VIDEO: Canadian teen lands invite to Royal wedding

Prince Harry and Meghan Markle have invited Faith Dickinson, founder of Cuddles for Cancer

Ponoka County worries about Prussian carp in Gull Lake

Alberta Environment delays pumping due to at least 1,000 carp found near the pump channel inlet

Health committee cheers idea of national pharmacare program, but cost an issue

Conservative health critic Marilyn Gladu says she fears costs could be far higher than $19 billion

Most Read