Homebase Mortgages

What are the Advantages of Portable Mortgages?

\"portableEveryone’s trying to get you to get a portable mortgage, but are they right for you? As experienced Toronto mortgage brokers, we can’t tell you enough about the advantages, but they’re not right for everyone. If you move a lot (your company shifts you to different cities or provinces every five years for example) these will be a great fit, helping you keep your investment intact. Here we’re going to go over the advantages, disadvantages and show you how to select the right one for your individual needs. Let’s get started!

Benefits of a Portable Mortgage

There are two main benefits of a portable mortgage:

  • Avoid Closing Costs

The ability to avoid closing costs is the first advantage of a portable mortgage. You won’t have to pay as much as you would if you were starting out with a completely new mortgage. It’s important to make sure that you know what the “Good Faith Estimate” is so you know how much you’re going to have to pay when the new mortgage closes. Any money saved is good money, so weigh your options carefully!

  • Carry the Same Interest Rate to Your New Home

If you get a second mortgage now while interest rates are great (like if you used one of our mortgage brokers for example!), you’ll be able to carry that over to your next house. A portable mortgage is flexible and helps you avoid debt traps. If you can have good enough credit to qualify for a low interest rate mortgage now while your credit is good, but your credit takes a dip later… you’ll still be able to reap the benefits of a good credit score.

So if you move from one area to another before you pay off your house, you can “port” your interest rate and favourable terms over to your new home. If you move frequently, this can be a big benefit!

Disadvantages of a Portable Mortgage

The disadvantages of a portable mortgage boil down to whether or not you actually need one. If you’re not going to need to move from your house in the next five years, you aren’t going to be able to get any benefit out of it.

  • Higher Interest Rates

Higher interest rates are part and parcel for portable mortgages. If you don’t need this for your situation, it might be better to just skip it. You can get a normal mortgage without having to pay this extra penalty if you don’t need a mortgage that’s portable.

  • Good Credit

You’re going to need excellent credit to qualify for this type of financing. You’ll be able to get a good mortgage but you’re going to have to demonstrate that you can pay on time and that five years from now when you do move that you can keep up the payments.

We’ll be able to help you prove this and make sure that you get the lowest interest rate possible. When you want a good portable mortgage, you’re going to want a good Toronto mortgage broker.

Also, visit our portable mortgage page today to learn more! http://www.homebasemortgages.ca/home-mortgages/portable/

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