Mortgage portability is a popular feature in Canada that allows homeowners to transfer their existing mortgage to a new property, without having to go through the process of reapplying for a new mortgage. It can be a great way to save time and money when moving, but there are some things you should know before taking advantage of it.
To understand mortgage portability, it’s important to understand how mortgages work in Canada. Generally, when a person takes out a mortgage, the lender will use the value of the home as collateral for the loan. This means that if for some reason the borrower fails to make the payments, the lender has the right to take possession of the home and sell it to recover their losses.
When it comes to mortgage portability, the process is relatively simple. The borrower contacts their existing lender and informs them that they would like to port their mortgage from one property to another. The lender will then assess the new property and approve it for mortgage portability if it meets their criteria. Once the new property is approved, the existing mortgage can be transferred to the new property without having to go through the process of reapplying for a new mortgage.
While mortgage portability can be a great way to save time and money when moving, there are some important things to consider. Firstly, not all lenders offer mortgage portability, so it’s important to check with your lender before you make any decisions. Secondly, it’s important to consider the fees associated with mortgage portability, as they can add up quickly. Finally, it’s important to consider that mortgage portability may not be the best option for everyone; for example, if you are moving to a new property with a lower value than your current home, mortgage portability may not be the best option.
Overall, mortgage portability can be a great option for many homeowners when they are moving to a new property. However, it’s important to understand the process and consider all of the associated costs before taking advantage of it.