Porting Your Mortgage

July 25, 2017 | Posted by: Shayne Beeler

Porting Your Mortgage

We’ve written before about “whenever there’s a mortgage decision to make, contact us” and porting your mortgage is one of those decisions. The most common misconception is that “porting” your mortgage is as straight forward as buying a property, selling a property you currently own and telling your lender you’re ready to port. However, porting your mortgage requires the exact same process as obtaining your mortgage in the first place. A full qualification and lender approval is required which includes the review of the property being purchased along with the applicant’s credit, down payment and income.

So what exactly is porting a mortgage and why do we need to re-qualify? Essentially porting enables you to, upon the sale and payout of your current mortgaged property, move that mortgage balance along with it’s remaining term to a new property. The benefits would be avoiding a payout penalty if you were within your current term or preserving your mortgage with a lower rate if current rates were higher. Again, lenders treat the qualification of a purchase with a port involved, the same way they would treat a new purchase altogether. The only difference is that a portion (or all depending on how much you’re borrowing) of your rate/term/amortization is already pre-determined.

So how do we approach a scenario where we’re likely going to “port” our mortgage? Call your Mortgage Broker and please do so before starting the process of listing your home for sale! The process can be much less stressful if we financially plan your next purchase from the start. We’ve encountered instances where someone was unaware of needing to re-qualify on a port and they ended up scrambling during the process once they realized there were steps yet to be completed. Although this happens occasionally, given the misconception of the process, please contact us so we can make sure it doesn’t happen to you.

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