How could moving affect my mortgage?
If you’re thinking of moving, consider reviewing your mortgage’s portability conditions.
It’s the day and age where a fair number people don’t stay in their homes for more than a couple years, whether it be because they’re starting a family or moving up the property ladder. These homeowners find that they’re moving before their existing mortgage term is up. Luckily, lenders now offer portability options for their mortgages, meaning that if you decide to move, you can bring your mortgage with you.
When you port your mortgage, normally you will need a larger mortgage than you currently have. At this time, the lender will “blend” your existing rate for the mortgage amount you have with the current market rate for the amount you will be increasing your mortgage by. As long as you move into your new home within a certain period of time of selling your current home (normally ranging between 30 and 60 days), you will not pay a prepayment penalty, which will save you upwards of $3,000.
Note that the “blend and extend” is best when current rates are the same or higher than your existing mortgage. If rates are lower it might make sense to get a new mortgage (and therefore the lowest possible interest rate).
First Foundation would be happy to discuss the details of porting your mortgage before you sell your home.
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