Hello, there is very little chance that any lender will waive the penalty associated with a closed mortgage. The only time that they may be able to get approval to waive the penalty is if you were to get another mortgage with them with a higher balance to replace your existing mortgage. Even then they will want you to port the mortgage to the new property and effectively honor your existing mortgage agreement. It does not hurt to ask and if you are a high value client with the bank they may try and eat some of the penalty cost but a full waiving of the penalty is unlikely. I hope this has helped. If any reader has questions regarding penalties or porting please do not hesitate to contact me at any time. Abraham Niyazi - Mortgage Agent - Lic#M08010640 - Centum One FInancial Corp - Lic 10758. Cell: 416-993-4082 Toll Free: 1-866-728-3708 x 115 http://www.centum.ca/abraham_niyazi/ I deal with 25 lenders and can do mortgages across Canada except Quebec.

You can`t break your fixed mortgage without a penalty. There is no chance a bank will let you do this unless you have a variable mortgage.

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Where do i find a calculator that shows whether it is worth paying a penalty ($2700) to break my existing mortgage(4.71%with 2 yrs left to go with a lower rate (3.55%)?

For calculators on mortgages, try bankrate.com They have all kinds of calculators and information, including info on how to figure out when it is worth refinancing. (does "2 yrs left to go" refers to when you don't have to pay a penalty? If you have many years to go on your mortgage, consider getting a fixed rate if you think interest rates may go up in the future...) You can even comparison shop for mortgages on bankrate.com.

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I live in houston, texas and i am thinking about refinancing my house. if i do it now i have to pay a prepayment penalty that is equal to 6 months worth of interest payments. would the penalty be tax deductible? i also understand that there are some laws that prevent mortgage companies from charging these penalties. is there anyone out there that can point me in the right direction so that i can find out if my mortgage prepayment penalty is illegal? preferrably someone who knows about texas laws?

If you pay off your home mortgage early, you may have to pay a penalty. You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan So if the prepayment meets the above qualification, then yes you could claim it as Mortgage Interest on the Schedule A Publication 936 http://www.irs.gov/publications/p936/index.html

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We have a home that its rent is about half of the mortgage. my husband wants to get a loan with 3 year pre-pay penalty and take out some money as well. this way he wants to lower our monthly payments but at the same time, get the equity as cash. in 3 to 5 years if the housing market is still bad, he wants to let go of the loan and foreclose, and if the market is good, then he wants to sell. we are a little squeezed for money now and i think he is not thinking rashionally. is this a good thing?? we have a great rate of 6% fixed now on the house, but we got a second mortgage on it that is making our payments a little high. what are the consequences of getting such a loan and should we just try and pay the high mortgage. who knows what's going to happen with home prices? this is a house worth 1.2 mil and we owe about 950 thous on it. help me.

Home price is dropping right now and will continue to drop the next few years. Good luck with your cash out refi., your house isn't worth 1.2 mil.

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I have a 750 credit score, owe 264000 on my mortgage - no other debt, house is worth 330000. i have 500000 cash in the bank in cds and iras. i plan to pay off the mortgage in 4 years when the cds mature, but in the meanwhile i am paying 6.8% on my mortgage and only earning 5% on my cash. i have no job and cannot qualify for full doc. but i can manage my mortgage payments as i make money in unusual (and legal) ways. however i would like to find a rate of 3 or 4% that will be good for 4 years with no prepay penalty , after that it can adjust to 20% for all i care. i would be willing to sign the cds as collateral to pay off the debt in 2010. anyone know where i can get a better rate in this situation without paying any closing costs? thanks

Sorry can't be done. Currently we have a flat yield curve in the market so even short term arm loans 1,2,3, 5 etc are all running around 5.875-6.00% ish for full documentation loans. Given that you have to go No Documentation due to your job situation you'll be looking at about .5- 1.00 higher rate. Also since you have to go no doc you'll have to get a mortgage broker involved in the process and they'll charge you pretty fat origination fee. You can't show assets on a no doc loan so the lender will never know about them. There aren't any no employment verifcation, but verified asset programs out there either. Your home serves as collateral on the loan so pledging other assets doesn't make sense. Best bet is to just ride it out for now, and don't fall for option arm with a low teaser rate that swells up to 8-8.5% one or three months later.

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I have a morgage with the halifax, currently half is on the svr now at 3.5% and the other half is tied in at at fixed rate of 6.65% until a year in septmeber. i have done the maths a month ago and it is worth me paying the penalty of £1280 to get the half out of the fixed rate and onto the svr. i have been given the run around by the halifax on how to pay this penalty for nearly three weeks, for example you can ring up and pay, (nope), you can see a mortage advisor and pay (nope) finally i got an appointment to at my local branch today to pay it. guess what....? halifax changed the rules from last saturday, i am not allowed to pay the penalty and revert to the svr, i have to to take out one of there more expensive fixed rate deals.....! having been given the run around for three weeks......i am livid...to say the least.....

Can you not go elsewhere? Ditch the fix tell them to stuff the STV and move the whole lot to another company. When are banks going to realise that we are all a lot more money savvy than we used to be - because we have had to become due to them cocking up right left and centre and are not going to be mugged by them anymore.

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I'm 26 and started putting money into a roth-ira 10 years ago. i really want to buy a house. i know first time home buyers can take $10,000 out of their iras without penalty. would it be a good idea to use this money and some more from savings to buy a home? also, i am young enough that i think i could still have roommates for another 5 years (who could help pay my mortgage) should i leave my ira alone and save for a few more years or should i cash it out next year and buy a home?

I was able to use the fact that I had the IRA's toward my home purchase without actually having to cash them in. I did have 10% saved for a downpayment, though, separate from the IRA's. Shop around for lenders and find some terms that are agreeable to you. There are a lot of first time homebuyer programs out there that you could probably take advantage of. You are smart to think about having roommmates to help pay for the mortgage. Sounds like you are very much financially on the ball if you set up an IRA 10 years ago! There are people 20 years older than you are now who haven't even begun to think about saving for retirement. Smart girl...I'm impressed.

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My mortgage allows me to pay down 20% each year without penalty. i will soon come into some money from the sale of another property. the closing on that isn't until next year (feb). question is: should i borrow money to pay this calendar year's 20% rather than lose it altogether, and then pay it back in feb when i get the $$ from the other property? is it worth it to do this, if the bank will lend me the money?

I see the desirability of paying down this year's 20% to gain a few years of "investment" of those $ at whatever your mortgage interest rate is; but paying an extra 20% {of o/s loan or original loan?} each year means you have a very short lived mortgage which lessens (but does eliminate ) the benefit of your idea. {The point here is you probably would not want to offset the gain with extra fees for a short-term loan, if any.} One hang-up might be if there is a problem with the sale and closing of the other property. Certainly crunch the numbers and ask the bank for a "bridge loan" if it looks like a good deal. Or, can you compromise and maybe pay a lesser %age than 20%?

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Firstly, i live in ontario canada, so this deals with the canadian banking system. my husband and i currently have a line of credit worth $25,000 at 4.55% interest. we have a closed mortgage worth $165,000 with a term of 5 years @ 5.3% interest and an ammortization period of 25 years (we are doing accelerated weekly payments, so our mortgage can be paid off sooner). our mortgage does not come up for renewal until june 2011. it is forecasted that interest rates are going to start climbing again, likely beginning this summer...they won't climb quickly, but will start to again. at this time, we are aggressively paying down our line of credit and we expect to have it down to $10,000 by the time our mortgage is up for renewal next year. we were talking to an account manager last night, and what they recommended was that we take our line of credit, put it on our mortgage, switch to a variable rate mortgage for 5 years (so our rate would go down to prime, which is currently at 2.25%), and take the additional penalty of about $5,000 for ending the term early on the closed mortgage. the way they explained it to us was that our mortgage payments would go up slightly, but we'd be paying off so much more interest, so the penalty would be worth it to take. if we took a closed variable rate mortgage for 5 years, we'd pay whatever bank of canada prime was. if we took an open variable rate, we'd pay prime + .70%, but could easily get out of the term if we wanted to with no penalty. we're not sure what to do. is it worth it to consolodate and put our line of credit on our mortgage + take the penalty? or should we just continue chisling away at the line of credit, wait until our mortgage is up for renewal and then take a variable rate mortgage (assuming prime is still pretty low). i hope i explained it all okay, thanks for the advice in advance.

If I understand correctly, you're about 4 years into a 30 year mortgage. Several points come to mind. The first is that the only way to make a good judgment is to take ALL the costs with switching mortgages, ie the penalty for closing the first mortgage as well as all the costs for the new mortgage, which will be in the range of 3-5K, make some guesses as far as interest rates and see how the costs compare. You don't say what your current mortgage could go to, ie +2% every 5 years, etc; this will have a bearing. If you do make a switch, why aren't you considering a 15 yr mortgage? Your payments go up by 15-20%, but you pay off the mortgage in half the time. In the same vein, while paying of your line of credit is good, your mortgage is at a higher rate, I would put most of the extra money toward it. Print out an amortization schedule and look at where you are on the mortgage and see how many months you can knock off the mortgage by prepaying on it. (Look at the principal column, so for every $ extra, it makes a big difference as at that point in your mortgage, for every $1K regular payment, $100-150 is going to principal. So if you dump in $1K extra, you just shortened the mortgage by 8-10 months.

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I want to buy a house worth about £100,000 but i will have about £25,000 a year spare that i want to plough back into my mortgage to get it paid off really quickly to avoid paying too much intrest. i looked at www.oneaccount.com which seems the best as no penalties for early re-payments (in fact they encourage it!) but i want options. i think virgin does a similar deal where you can pay off your mortgage really fast with no penalties. any one done anything like this with a 'one account' like this and can advise me who to got to? in response to 'take two'.....i dont have a mortgage lender thats what the whole question is about!

This may sound tedious but your best bet is to actually make an appointment with various mortgage lenders and sit down and talk with them. Every situation is different and these days banks are capable of tailoring a mortgage to your requirements. Best of Luck

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I currently have a fixed rate with a trust company on a 5 year term at 5.8% for approximately 155,000. i'm about to start the second year in the term (i've paid 11 months so far). i've spoken with my regular bank about possibly moving this mortgage to them (the reason i didn't initially use them is because they wouldn't accept rental income so i didn't qualify) and they are now willing to offer me a much more favorable rate than the current lender. so i gave the trust company a call and they said the payout penalty would be $7000. wow that seems really high to me. usually when i sell a property i end up paying about 3 months worth of interest to close the mortgage, so i was expecting them to tell me it would be $2400ish lol. then i got to thinking, is payout penalty different than the penalty to move that mortgage to another lender (would that be called refinancing?)? the mortgage does have a 10%/yr max paydown clause, so now i'm thinking i may have asked them for the wrong penalty estimate. thoughts?

I never accept a prepayment penalty on financing when I take out a mortgage for investment property . did you get more favorable terms from this lender than from anyone that would waive prepayment penalties? If so, this is how they can afford to offer the better terms. they get the money on the backend. The things you are trying to equate seem to be all different mechanically, but at the end of the day, interest charges are about risk and shopping. you have to look around and negotiate properly to get the best deal, including asking to have prepayment penalties waived. a lot of banks will waive them just for you asking them to. But if you were perceived as higher risk by your bank, because your income was in part based on rentals, which were tanking a year ago, then the other lender just gave you a better deal because they were compensated for the risk by a contract that locked you in via the penalties for refinancing.