In our current high rate environment, there are 2 mortgage strategies that are important to briefly touch on.
For homeowners with existing home that have assumable mortgages, they have an opportunity to sell their home and their low-interest-rate mortgages to qualified buyers. For instance this works very well for a homeowner who has a mortgage from about 2 years ago before rates quickly jumped by almost 5% since they may have this assumable mortgage taken over by the the new buyer attaining this huge benefit of a low rate while the homeowner saves money by avoiding a penalty. Win, win situation!
For home sellers with a portable mortgage, they can transfer their current mortgage from their existing home to the newly purchased property. Like the example above, this works best when a home seller’s existing mortgage rate is lower than the prevailing market rates as is the case for most in today’s high rate environment. So if you sell your home and buy a new home, you can bring your mortgage with you to save on both the mortgage penalty and also on interest by carrying the lower rate mortgage with you.
If you or someone you know needs more helpful mortgage tidbits, reach out to us at Lotus Loans & Mortgages Corp located in downtown Mississauga.