Mortgage Transfers: A mortgage transfer is a transaction in which either the borrower or the lender assigns an existing mortgage, which is a loan to buy a home or use the home as collateral, from the present holder to another person or business. Homeowners who are unable to make their mortgage payments on time may request a loan transfer to avoid defaulting and going into foreclosure. When you receive a mortgage from a lender, you sign a contract that lasts for a set amount of time. This is referred to as the mortgage term, which can last anywhere from a few months to five years or more. Unless you pay the sum in full, you must renew your mortgage at the end of each term. To pay off your mortgage in full, you will almost certainly need many terms.
How a Transfer of Mortgage Works: If you are thinking about porting or transferring your mortgage, it is best to do it while your interest rate is lower than what lenders are now offering. This is because your blended rate will end up being lower than if you were to start a new mortgage from scratch. However, if the mortgage rate you may qualify for today is lower than the one you have now, porting may not be a good idea. You would have to consider refinancing your mortgage to get these reduced rates. Before you decide whether it is a smart idea to break your mortgage, be sure you consider the penalty.
Can you transfer any mortgage?
There is a chance you will not be able to transfer your mortgage at all. Some lenders enable you to transfer your mortgage to another lender, while others do not. This is an essential characteristic to have if you want to move throughout the duration of your mortgage. A mortgage broker can inform you which lenders are transferable.
Finally, note that not all mortgages are transferable. Most variable-rate mortgages, for example, cannot be moved. The time you must finish the port, which is normally between 30 and 120 days, varies according on the lender. Some will only give you 30 days, which may be insufficient in some cases. But 120 days is usually enough time for someone to complete the sale of their old property and complete the purchase of their new home.
Consider What Mortgage Type Works for You: While most individuals pick a five-year fixed rate mortgage to keep their mortgage payments steady over a longer period, your unique circumstances may dictate that you pick a different term. Shorter durations have lower interest rates, but the danger of rates rising at your next renewal is higher.
A variable rate mortgage, in which your interest rate swings with the prime lending rate, is another option to explore. A variable rate open mortgage is open, meaning you can make extra payments, pay off the loan, or move to a fixed term at any time without penalty, offering you maximum freedom.
Consider your Payment Schedule: One of the things you will have to decide when renewing your mortgage is how often you make payments. Monthly instalments are the most common, but you may choose for semi-monthly, bi-weekly, or weekly instalments if that is more convenient for you.
Start Looking Early: If you are in the market for a new home and want to move your current mortgage, make sure you do your homework and decide if porting is the best option for you. It is ideal to talk to Mortgage Architects three to six months before your existing mortgage term finishes if you are thinking about switching mortgages. This will allow you enough time to investigate your alternatives and locate the best rate and term for you, as well as alter your mortgage before your renewal date.
