What Calgary’s first quarter housing market trends could mean for you
April 19, 2018
The Move: Reentering the Market with an Existing Mortgage
March 2, 2016
Sometimes the conversation about reentering the market with an existing mortgage can feel like a lot to get through. And in fact, there is a lot to talk about when it comes to the topic. Unfortunately people tend to overanalyze it, and instead of pursuing their next real estate goal they forget it altogether. Even worse, some people practically close their eyes and point to an unknown option, deciding to make the choice easy rather than informed.
As you already know, I'm in the business of helping you become the master of your own finances, which means blindly agreeing on one option over another isn't going to work. Becoming defeatist in your goals isn't going to produce our wanted results either.
I'm going to spend a bit of time explaining two concepts when it comes to your existing mortgage, but really encourage you to pick up the phone and call me so you can become the expert in understanding and reaching your real estate goals. The two ideas we'll briefly discuss are porting mortgages and blending mortgages as there is value in both, though, one may not work as well for you as the other.
When you port a mortgage, practically speaking you are moving a mortgage from the previous loan to the new loan amount. When you port your mortgage, you are transferring the existing interest rate and terms from the old mortgage to the new mortgage loan. Obviously this could potentially be a money saver if the existing rates are preferable to the current rates available by lenders. However, porting a mortgage looks differently depending on whether your loan amount remains the same, increases (the most typical reason), or decreases with your new purchase. It is important to keep in mind when you port your mortgage, you may breech your current contract, and may have a pay-out penalty if you choose to cut off your current agreement in favour of a new agreement. Before you write off the option however, your pay-out penalty will vary, and it would be a great idea to call me and see if paying that penalty will actually save you money in the long run or not.
On the other hand, there is the option of blending your mortgage. Having to blend a mortgage typically happens when you need to increase your mortgage loan. When you blend your mortgage, you can avoid those pay-out penalties by keeping the existing loan, and essentially 'adding' the required dollar amount as a new loan. This means the existing loan will remain with the existing interest rates, and the 'added' value will be blended into your existing loan at the new rate.
Again, these options really depend on what you're aiming for, and I'd love to start that conversation with you. So go ahead and contact me so we can make those dreams a reality.