Mortgage portability is an increasingly popular option for Canadian homeowners. It allows you to take your mortgage from one property to another without the hassle of reapplying for a new mortgage. This can be a great way to save money on closing costs, and to get a better interest rate. However, there are some things you should know before taking advantage of this option.
First, it is important to understand the process of mortgage portability in Canada. Generally speaking, you will need to prove to your new lender that you meet their criteria for a mortgage. This includes providing proof of income, assets, and credit score. You will also need to show that you have the ability to repay the loan. Once you have been approved, you will need to transfer the title of your old property to the new lender. This typically involves a title search, which can be done by a lawyer or title company.
Once the title is transferred, your new lender will then transfer the mortgage from your old property to the new one. This process can take anywhere from a few days to a few weeks depending on the lenders involved. Once the transfer is complete, you will then be responsible for making payments on the new mortgage.
It is important to note that mortgage portability is not available in all provinces and territories in Canada. In some provinces, such as Alberta, mortgage portability is not allowed. It is also important to keep in mind that the interest rate on the new mortgage may be higher than the rate on the old one.
Finally, it is important to understand the costs associated with mortgage portability. Generally speaking, you will need to pay a fee to the lender for the transfer. This fee can range from a few hundred dollars to a few thousand. You may also need to pay legal fees and title search fees. It is important to factor in these costs when deciding if mortgage portability is right for you.
Mortgage portability can be a great option for Canadian homeowners, but it is important to understand the process and the associated costs. Be sure to do your research before deciding if this is the right option for you.
