Purchasing your Next Home
Time to move to your next home?
There are lots of reasons to do so – your family has expanded or become smaller, your moving from your 1st condo to a home with a yard, moving away from a yard into a condo… what ever the reason, I can help.
If you plan on selling your home current home and buying a new one, your first move should be to look into your mortgage options. You need to consider your current mortgage of course, and the mortgage that you’ll need on your new house. You will also need to look at what your estimated sales proceeds and closing costs will be to determine exactly the cost of moving. If you are downsizing then there is no additional financing needed. But if you are trading up’ and planning on having a bigger mortgage, you need to examine your options of taking or breaking your mortgage. It’s worth a professional mortgage analysis to determine witch option is the most beneficial to you.
Bringing your mortgage with you
Many mortgage today are portable, which means you can take your current interest rate and mortgage contract to your new home, subject of course to certain conditions like the amount of your mortgage. If you need a bigger mortgage, you can often “blend” your current mortgage rate with the mortgage rate on the additional funds you need. This can be beneficial if breaking your current mortgage will cost you a large pre-payment penalty or if your current rate is lower than today’s rates.
Getting a new mortgage
If today’s interest rates are lower than your current mortgage rate, you might want to consider breaking your current mortgage and getting a new one for the total amount you need. To break your mortgage, your lender typically has the right to charge a penalty based on the greater of three months’ interest or interest rate differential (IRD), which is essentially the difference between your old rate and current rates of your remaining term. Your mortgage broker can help you compare your new blend/extend rate with the rate you would get with a new mortgage to see which will be better financially for you.
Keep in mind, too, that some mortgages are assumable, which means the buyer of your home can assumes your current mortgage (subject to meeting the financial requirements of your mortgage lender) and you will not have to pay a penalty.
Call me, I'm here to help - Laurie Anne Faulkner 250-588-2288