Move Your Mortgage To Save On Interest Rates And Closing Costs

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After years of saving and planning, I finally opened my own retail establishment. Before I could do so, I spent a lot of time looking at real estate options. With the help of a commercial property management firm, I did find a storefront with a great location, and enough room for my business. The agent at the firm helped me a lot by creating a profile of the type of commercial property I needed. We went over details such as lighting, display space, and even the number of electrical outlets. With the profile in hand, she found several properties that were worth considering. If you are setting up a new business and need space, let me explain why working with a property manager makes sense. I'll tell you more about how we worked together to find a place that met all my needs, including the rental cost.


Move Your Mortgage To Save On Interest Rates And Closing Costs

6 May 2015
 Categories: Real Estate, Blog

If you move and buy a new home every few years and want to save money, consider a portable or movable mortgage.  A portability clause in your mortgage agreement allows you to change homes, move your existing mortgage, and incur less fees in the process.  This is particular helpful to people who frequently have to move to a different city or state because of work.  Read below to learn about how portable mortgages can benefit your bottom line.

Portability Clause

  • If you are applying for a new mortgage and foresee the need to move in the near future, ask your loan officer about including a portability clause in your agreement.  The clause will have to be approved by the underwriter.  Ask your attorney to look over the contract to make sure that the clause was included.  Make sure that there are no penalty fees or conditions related to transferring the mortgage.   
  • If you already own a home, check to see whether a portability clause is included in your mortgage contract.  If you have already gone through closing, you cannot ask to add the portability feature later on. 

Advantages Of A Portability Clause

  • If your existing mortgage interest rate is lower than current market rates, you get to retain it and save thousands of dollars in the process. 
  • If you have an adjustable rate mortgage, you will not be penalized for breaking the contract.  This will save you a large sum in penalty fees. 
  • You also don't have to pay closing costs.  Closing costs are dependent upon the purchase price of your home and typically range from 2 percent to 5 percent of the price.  So by transferring your mortgage instead of getting a new one, you can save thousands of dollars.
  • If you pay private mortgage insurance because your mortgage is more than 80% of the value of your home, you can transfer that too.  You don't have to incur any extra fees for the transfer, and your premium will not increase as a result of it.

Some Caveats

  • You still have to re-apply for the mortgage with your current lender to prove your credit-worthiness.  Don't just rely on your relationship with the loan officer or your steady mortgage payment history over the years to assume that you will be able to port your mortgage.  The financing institution will re-check to see if there are any recent dings on your credit like late payments and debt delinquency.  Failure to address and resolve those can sabotage your mortgage application.
  • Be aware that if you are transferring your mortgage to a more expensive home, you may need to put down additional cash.  The lender may not agree to refinance the entire amount. 
  • Make sure to inform the lender about the location of the property before starting the mortgage transfer application.  A property appraisal will be necessary before a financing offer is extended.

Moving to a new house is no picnic at the park.  A portable mortgage makes the process of moving less stressful and lets you save a significant sum of money. For more information, contact a mortgage broker in Cold Lake.