Quote:
Originally Posted by Street Pharmacist
I'm going to likely be upgrading in 5 to 6 months.
2 questions:
1) What type of mortgage should I get? I'd like to go 5 year closed I think as I'll be in this place for at least 5 years. Is there any advantages to go live or shorter?
2) from a real estate perspective, am I smarter to pick a different time? I'm not too picky about when, just want the right house and would like to wait until my wife graduates university
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Find out what your penalties might be if you try to get out of the mortgage early.
If you take on a 5 year and decide to sell your home in 3, will you be facing a large penalty for breaking out early? Will you be porting the mortgage over to a new place?
With rates so low, a lot of people are facing interest rate differential (IRD)penalties right now which can be 10's of thousands if you get out early.
I just sold/bought a new place and would have had a $12,000 penalty had I not ported my mortgage over to the new place. Had I been moving away from the country or something like that, it would have been a big issue.
My bank also gave me 120 days to port, where a lot will give you 60 or even less. Take things like this into account as well when choosing the mortgage that's right for you.