Home Purchase Mortgage
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Your first move must be to look into your mortgage options! You can acquire a much lower interest rate if you consider refinancing your mortgage. Keep in mind that it is also very risky, as it may incur a significant prepayment penalty, so make sure you do some research beforehand.
Overview.
Have you looked into your mortgage options as you plan to sell your current home and buy a new one? It is important to consider the mortgage options available to you. It will help you plan if you decide to move out and maximize your options. A mortgage broker and consultant will help you understand them properly. More importantly, your mortgage brokers and consultants will help you secure a larger mortgage. Imagine that your options will include bringing your mortgage with you if it is portable. Also, you can often combine the current mortgage rate you have with the mortgage rate on the additional funds you will need.
Your Journey Starts Here.
A mortgage is a legal and binding contract between you and your lender. The agreement specifies your loan details and is secured on your chosen property, such as a house or a condo.
A mortgage is unlike most types of loans because:
- A property secures the loan.
- It may have a balance owing at the end of the contract.
- It normally needs to be renewed multiple times before the balance is paid in full.
- It may require meeting qualification requirements, including passing a stress test.
- It needs a down payment.
- Breaking the contract may incur a penalty.
- The loan is typically for an amount that may be in the hundreds of thousands of dollars.
Today’s current interest rates are still at their low, one of the lowest in history due to the pandemic. This is a good time to consider breaking your existing mortgage and getting a new one to achieve the total amount you need. To break your current mortgage, your lender has the power, as it is one of their rights, to charge a penalty based on the larger of three months’ interest or the interest rate differential (IRD). This IRD is basically the difference between your former rate and the current rates for your current term.
Different lenders calculate IRD differently, based on their terms and conditions. You must understand and read the terms and conditions of your bank to understand how to calculate your IRD. To get the actual penalty from your lender, you must request it. Typically, the three-month penalty applies if you are in a term longer than five years and you are past the fifth year. This applies to you and not the IRD, making breaking your mortgage more appealing.
Another option is to compare your new rate (either blended or extended) with the rate you plan to get with the new mortgage. The exact terms and conditions of your existing mortgage plan need to be reviewed by the lenders to determine if other factors need to be considered.
We are up-to-date on the current and latest trends, rates, and all new available opportunities for you. We guarantee and assure you that it is worth your time and effort to ask a professional mortgage expert like us. Let us analyze and determine the options available for you and choose which is most beneficial for your situation. You can choose from a broad range of lenders in our portfolio. We can definitely help you with all of your mortgage details for your next home and other properties.
