Transferring Mortgages – What Do I Need to Know?
When most people look for a mortgage or a new mortgage, they will try to get a mortgage with the features that meet their needs and saves them money. Also, they will look into a mortgage that will give them the ability to pay it off faster. When it comes to transferring a mortgage, there are a number of important details that you should be aware of before you make your decision so that you know that the final decision is the right decision.
It is not that difficult to transfer your mortgage from one financial institution to another. There are a number of benefits to transferring a mortgage such as: better interest rate, better service, increased repayment flexibility, or it is more beneficial to have all of your finances with one lender. Even with all of these benefits, it is still important to make sure that transferring a mortgage to another financial institution is right for you.
One of the best times to explore money-saving alternatives is when your mortgage is up for renewal at another financial institution. The first thing you should do when considering a mortgage transfer is to make sure you have a specific written rate guarantee such as a written 120-day rate guarantee. Other options you should consider include: fixed or variable rates, mortgage term that can be anywhere from 6 months to 10 years, flexible payment schedules that fits your cash flow, as well as flexible alternatives such as a Home Equity Line of Credit.
It is important that the lender you talk to has knowledgeable people who will help you get the right mortgage. In addition, you have to learn about any possible penalties if you close your current mortgage before its maturity date. It will help you calculate whether or not it is worth transferring the mortgage. Most lenders have stipulations in their contract where they will charge an early payoff penalty on closed mortgages if the mortgage is paid prior to the date of maturity. The applicable penalties would be equal to the greater of the interest rate differential or 3 months interest plus any applicable fees related to the discharge request.
When transferring a mortgage to another financial institution, generally most institutions will require such items as: void cheque, copy of your renewal statement, proof of property ownership, confirmation of income, and a copy of the fire insurance or homeowners\’ insurance statement. If you want to reduce the mortgage amount, consider the following: increase the frequency of payments, take advantage of increased payment options, take advantage of lump-sum payments, choose a shorter amortization, and check to see if lender will waive the mortgage transfer fee.
There are many benefits to transferring a mortgage. You will know if you will personally benefit from a mortgage transfer if you do your research, get all of the details involved with transferring the mortgage and any penalty fees associate with closing your current mortgage. This will help you determine if it is economical so that you can make a more informed decision and that it is the right that decision that meets your needs.