Mortgage Question - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Olao32 · 09-13-2010, 10:46 AM

For all you guru’s out there I have a question,

I currently have a house which I am carrying a mortgage on. About 2-years in on a 5-year term. It’s getting to the point that my wife and I would like to move into a bigger house. Only thing, is I’m not really sure how it would work. When we qualified, combined we made ~100K gross, now, we’d be around ~170K combined. So I am pretty sure we could qualify for another mortgage in addition to our current, and carry both balances as I am not really sure if we are going to keep our current dwelling and rent it out, or just sell it off.

But in respect to our current mortgage, say we decide to sell our current place, can we just roll it over into the new house, increase the amount and continue to pay it off? Or would the bank (Scotia) basically us we’d have to pay it off in full, take a hit on early out-fees, and get an entire new mortgage?

Any help would be appreciated.

VladtheImpaler · 09-13-2010, 10:53 AM

PM Mike Oxlong.

VladtheImpaler · 09-13-2010, 11:09 AM

Quote:

Originally Posted by fotze

Yes, that way, other people in a similar situation cannot learn from this case. This would also eliminate the point of a message board.

Well, Mike can respond here.

His question seems to be pretty specific.

VladtheImpaler · 09-13-2010, 11:24 AM

Quote:

Originally Posted by fotze

I'm curious though, because the banks always stuck it to me in these cases and was wondering if you can get around paying penalties.

I've taken my mortgage with me a couple of times...

troutman · 09-13-2010, 11:24 AM

Your existing mortgage may be portable to another property (check the terms).

You may not incur a penalty if you take out a new mortgage, and deal with the same lender.

Tron_fdc · 09-13-2010, 11:40 AM

I deal with RBC, and as long as I stick with them for my new mortgage, they don't charge me any penalties. I've done this several times.

If they try to charge you penalties for transporting your mortgage, tell them you're switching banks.

Tron_fdc · 09-13-2010, 12:11 PM

Well, once the mortgage is paid out, and you paid all the penalties, I would have switched out of spite. Eff them, the interest represents a huge chunk of change, and if they aren't willing to roll the mortgage over, screw em.

And yeah, it's all relative. The only reason I got any kind of preferential treatment was because our company is one of the oldest RBC clients in Canada. If I was 18 making 35K there's no way I would get away with half of what I did.

MotoRacer · 09-13-2010, 12:30 PM

Send your questions to http://www.westerncanadamortgage.com/

worked wonders for me

alltherage · 09-13-2010, 12:33 PM

Has anyone ever heard of cash back mortgages? I know essentially you pay higher interest on the "cash back" portion but just wondering how these work. As a first time home buyer this might be the right way to go.

bizaro86 · 09-13-2010, 12:34 PM

Most Scotia mortgages should be portable. So you'd talk to someone from Scotia, qualify for a new mortgage. Then you'd basically pay what you're paying now, plus the current interest rate on the new mortgage. They "blend" the rate.

Mike Oxlong · 09-13-2010, 02:46 PM

Quote:

Originally Posted by bizaro86

Most Scotia mortgages should be portable. So you'd talk to someone from Scotia, qualify for a new mortgage. Then you'd basically pay what you're paying now, plus the current interest rate on the new mortgage. They "blend" the rate.

That pretty much sums it up. (Except for qualifying with Scotia again)

Scotia mortgages are for the most part portable. So you would take your current balance and current rate with you to the new house and then just add the addtional amout you would need to purchase that house at todays rates.

I would double check with Scotia as to their porting rules on that mortgage. A lot of lenders require you to port it within a certain amount of time.

You can potentially pay that mortgage out along with the payout penalty and get a brand new mortgage as well. If you only have 2 years left on the term it might be worth it depending on the rate you are currently paying and the rate we could get you for the new mortgage.

Scotia is a lender I do a lot of work with. If the mortgage is in fact portable and you want to get an additional Scotia mortgage for the additional funds needed chances are I can get you a better rate from them then they will offer you.

I would be happy to answer any of your questions you have. Feel free to pm me with more details and we can figure out the best option for you, whether you rent the old place, sell it, port the mortgage or get an entirely new mortgage.

bizaro86 · 09-13-2010, 02:51 PM

Quote:

Originally Posted by Mike Oxlong

That pretty much sums it up. (Except for qualifying with Scotia again)

Right, I should have mentioned you could use a mortgage broker to get your mortgage from Scotia (which is what I did).

Unless you meant he didn't have to qualify again? It sounds to me like he wants to increase the loan amount, so wouldn't they check to make sure he can afford the higher amount?

Mike Oxlong · 09-13-2010, 02:52 PM

Quote:

Originally Posted by alltherage

Has anyone ever heard of cash back mortgages? I know essentially you pay higher interest on the "cash back" portion but just wondering how these work. As a first time home buyer this might be the right way to go.

There are a few lenders that still offer cash back mortgages. We were actually discussing them a bit in another thread.

Basically the lender "loans" you the 5% needed for the down payment. They forward the funds to the lawyer at the time of closing.

In return you pay a significantly higher interest rate for the 5 year term which effectively pays back the loan and then some. Right now Scotia is offering cash back mortgages at 5.39% when you can get a regular 5 year at 3.89% (they aren't the lowest either there are a few in the 3.6% range)

I know it can be tough to come up with 5% with house prices the way they are but I would highly reccomend it if you can. It is a far better route to go than the cash back opttion.

Not to mention to qualify for the cash back option you application has to be absolutely sparkling. They are quite a bit more difficult to qualify for.

Mike Oxlong · 09-13-2010, 02:54 PM

Quote:

Originally Posted by bizaro86

Right, I should have mentioned you could use a mortgage broker to get your mortgage from Scotia (which is what I did).

Unless you meant he didn't have to qualify again? It sounds to me like he wants to increase the loan amount, so wouldn't they check to make sure he can afford the higher amount?

No I was just not so subtly reccomending he use a mortgage broker....
I even know a good one.