Last week we talked about why today’s market may actually present an opportunity for homeowners looking to move.
This week, let’s talk about the financing side.
Many homeowners assume they have to wait until their mortgage renews before moving.
Often, that’s simply not the case.
Here are some of the options worth discussing with your mortgage broker.
1. Can you port your mortgage?
If you currently have an attractive mortgage rate, you may be able to transfer or “port” that mortgage to your next home.
Not every mortgage is portable, but when it is, this can help you keep your existing rate and avoid paying a mortgage penalty.
2. What if your next home costs more?
If you’re moving up in price, your lender may offer what’s called a blend-and-extend mortgage.
This combines your current mortgage with the additional funds you need at today’s rates, creating one blended interest rate.
3. Should you break your mortgage?
Sometimes paying a penalty actually saves money over the long term.
Variable-rate mortgages often carry relatively straightforward penalties.
Fixed-rate mortgages can be much more expensive to break.
This is one of those situations where it’s worth getting advice before making assumptions.
4. What is bridge financing?
If you purchase your next home before your current home closes, bridge financing can temporarily provide access to your equity.
It’s designed specifically to bridge the gap between two transactions.
5. How can you use your home equity?
Many homeowners have built significant equity over the years.
That equity may help fund your next down payment or increase your purchasing power.
6. Remember—you still have to qualify.
Even if you’re moving your existing mortgage to another property, lenders generally require you to qualify under today’s lending rules.
That’s another reason to involve your mortgage broker early.
7. Don’t forget the costs of moving.
Repeat buyers often remember the down payment…
…but forget about:
- legal fees
- land transfer tax
- mortgage discharge fees
- appraisal costs
- home inspections
- movers
- utility transfers
- new locks, window coverings and those inevitable trips to the hardware store.
Planning ahead makes moving far less stressful.
The Bottom Line
Trying to perfectly time the market is incredibly difficult.
Instead, focus on whether the move makes sense for your life and your finances.
When those two align, today’s market may offer opportunities that simply didn’t exist a few years ago.
If you’re wondering whether it’s the right time for you to move, we’d be happy to sit down, run through the numbers, and build a strategy together.
Sometimes that’s all it takes to discover that your next move is much closer than you thought.
And don’t forget if you need to buy or sell, please call Davelle.
My First Home: How to Buy Smart in Toronto
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