Quote:
Originally Posted by amorak
Mike - Had a collegue ask me - can you port the 35 year to another insitution, or are you stuck with them? it seems like there are mixed messages out there.
I realize you cant' refinance, but if you were 2 years into a 35 year mortgage upon renewal, that would mean you'd need to stay another 3 after that with the same bank before you were at 30 years (assuming you couldn't afford the increased payment going to 30 year amort prematurely). That would mean you were at the banks mercy for 3 years until you got down to 30 years amort left and could shop around?
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That would be the case. If you were on a 35 year amortization with a 2 year term, you would effectively have a 33 year amortization left upon renewal.
If you wanted to go with a new lender you would have to renew at 30 years, there by increasing your payments, or renew with your current lender at 33 years.
(This is what I have heard so far, I am waiting for clarification on a couple things and will update if I hear differently)
You would be at their mercy somewhat but really if they try charging you an insane rate the difference between a 33 year amortization and a 30 year amortization is not that significant. Say they tried charging you an extra 1% compared to the other lender, you could move to the 30 year amortization and your payments would be lower than an extra 1% on a 33 year amortization.