Five Points To Consider Before You List Your Home
There are several things to consider before you take the plunge and put your home up for sale. This might sound obvious, but the first step is to call your Mortgage Broker. You don’t have to look long for an unfortunate story of someone who didn’t understand their portability, penalty or transfer costs. Here’s how you avoid this scenario.
The anniversary date of your mortgage will depend on your penalty.
If you are in a variable-rate mortgage you will usually (unless you took some kind of no frills product with an additional penalty for the appearance of a lower rate) pay 3 months interest ( so a monthly payment and a half). In a fixed-rate mortgage it can be up to 1 - 4.5% of the outstanding mortgage balance. Remember we can estimate things, but the only guarantee you will have of your penalty is when the lawyer requests the payout statement.
Just because a mortgage says its portable doesn’t mean you don’t have to completely re-qualify.
Changing properties means complete re-qualification of everything; credit, income and property. Less than one per cent of mortgages actually get ported due to the changes in the market, or your circumstances.
If you have accumulated outside debt, you may not even qualify to purchase for more due to recent rule changes.
You’ll need clarity on what the approximate net will be after anything that is required to be paid out to improve qualification.
If you list your property and want to buy first or need money for a deposit.
You may need to change your mortgage first which you won’t qualify for if your property is already listed. This happens frequently when downsizers are selling.
Making a purchase requires a deposit that later forms part of the down payment, so understanding this before you go out shopping helps you plan for it.
Taking all of this into consideration before you decide to sell your home seems like information overload. No need to worry, our experienced Mortgage Brokers can assist you with all of this and help you determine what type of property you can afford. Along with needing the help of a Mortgage Broker, there are other things you can do before listing your home. Click on the link to see 10 Things to do before you list your home for sale for more tips. Contact Client First Mortgage Solutions today!
Original Article - Dominion Lending Centres - July 31, 2017