 鲜花( 115)  鸡蛋( 0)
|
 Example:Buyer A has a home with a $250,000 mortgage, at 4% interest a 5 year term and a 30 year amortization period. At the end of year 2, Buyer A must move to a new city due to a job change. Since the time of taking the original mortgage, prevailing interest rates have risen to 6%. Rather than taking a new mortgage, incurring prepayment penalties and higher interest rates, Buyer A’s mortgage has a portability feature.
6 X8 Y8 X: |! ? ~# Y% VBuyer A transfers his mortgage, on its original terms, to the new property. The interest rate will remain at 4%, there will be no prepayment penalties and the mortgage term will have 3 years remaining. Buyer A will pay a few hundred dollars in bank fees for the privilege to transfer the mortgage.
% o( T7 G$ V$ S6 `3 g& w6 ^
7 u8 j+ N3 Z( [1 X1 h' I1 k9 @Advantages of a Portable Mortgage6 \6 @3 H W0 ]! S! O. C4 p5 t0 L
A portable mortgage feature has several advantages for the right homeowners. If a homeowner has locked in to a low rate when mortgage rates are low, but then has either the need or the desire to purchase another home, the low interest rate is retained.$ B/ V3 e0 z+ p. d, _: ^
5 v2 i( i( y/ N; }4 Y0 A! x3 OPrepayment penalties can be severe, up to 3 monthly payments or the cost of increased interest in the remaining term of the mortgage. These amounts can equal several thousands of dollars.
4 k2 m& _' m, M; t
" { W$ ?9 e5 g: hIn addition, many of the costs associated with obtaining a new mortgage might not be charged. However, you might expect an appraisal fee for the new property, as the mortgage lender must be assured that the loan-to-value ratio meets their requirements.
) J7 I% d" p" g# P, F7 D( A9 w* g& @
At First Foundation, all of our mortgage products have portability features and we can explain their benefits when assessing your mortgage needs. |
|