Hello Lemuel. If you are selling and buying porting your mortgage is one of your options. Porting is the process of moving your mortgage from one property to another. There are 3 different types of ports that can happen when you sell a home and buy another. Each one different. Your mortgage can be either a straight port, port-increase, or port-decrease. The simplest is the straight port where you are moving your mortgage from one property to another with the same amount of mortgage. The rate, remaining term, and amount stay the same, no penalties involved and the process is straightforward as there is no new money involved. The second option is a port increase where you need extra funds for the new home, (this is usually the case if you are buying a more expensive home and have less down payment) In this case the remaining mortgage term is moved to the new property, the mortgage amount is increased and finally the interest rate is blended with today`s available rates. If the rates available today are lower than your interest rate then your rate will be blended and reduced, if the rates are higher today your rate will be blended and increased. I can do a rough calculation for you if you like, see my contact info at the bottom of the reply. The final port is the port-decrease. In this case you need less mortgage than the remaining mortgage amount you currently have. Your mortgage term, and rate get moved to the new property only the mortgage amount is reduced. There may be a penalty involved in this reduction of mortgage. If you are reducing your mortgage amount by greater than the allowable yearly prepayment options that you have signed for on your mortgage documents you may be charged a penalty for the extra reduction. There is one more option that one can consider, if your bank is not going to offer you a good rate on your port (they already got you so they often don`t) then you can always consider a new mortgage at another lender at full discount. It may save you more than your penalty to break, the calculations often tell the tale if it is worth it. I can do these calculations for you if you like and get you information on the lowest rates available today. I hope this information has helped you Lemuel. I can go into more detail if you like, explain further, and do some rough calculations, no obligation if you like. Please don`t hesitate to contact me: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.

Hello Lemuel, at the expiry date of any term you are free to choose a new term or a new lender. This decision will of course be based on what rates are available at the time of expiry. If you do not sign for a new term before your renewal date arrives most institutions will renew you on an open product of some sort. Beware some lenders may lock you in again especially if they do not have an open product in their mortgage options. Take this time to compare the different rate between lenders, this moment of renewal is the point you have the most power as a mortgage holder. Your current bank cannot keep you with them by threatening you with a penalty and most lenders will be happy to pay the cost of bringing the mortgage to them. My best suggestion is to get a rate quote from your current lender and take that quote to multiple banks to see who is the lowest. If you prefer a Mortgage Agent can do all the running around for you and approach multiple lenders for the best rate, the added bonus is a Mortgage Agent will have access to lenders that you may never even think of and those lenders most often have lower rates. Don`t be too concerned with having your mortgage at one of the big 5 banks because they do not offer any advantages over the smaller lenders and in the end your money is coming out of your account each month, make sure that you are paying as little as possible. Products and features are almost identical between the lenders, a Mortgage Agent can outline them clearly for you and you can make the decision. If you or any reader would like to know more please do not hesitate to contact me. Abraham Niyazi - Mortgage Agent - Lic#M08010640 - Centum One FInancial Corp - Lic 10758. Cell: 416-993-4082 Toll Free: 1-866-728-3708 x 115 www.centum.ca/abraham_niyazi/ I deal with 25 Lenders/Banks and can do mortgages across Canada except Quebec.

As long as there is not too much time between the sale of your existing home and the purchase of the new home most lenders will allow you to port the mortgage. In other-words you keep your existing mortgage and add the extra funds you need to buy the new house on top. The interest rate is a blend between what you have already and the rate at the time for the extra money you need. Now you have one mortgage amount, a blended rate, one mortgage payment and a new house!! -Abraham Niyazi - Easyrate.ca x 115

Powered by

I am currently trying to sell my house, but the introductory rate on my mortgage doesn't expire until 31st of dec 2009. if i were to sell my house in september (when i am moving away), i could incur a £3000 early repayment fee, as stated within the terms. i could leave the house empty until december and sell when the introductory rate ends but am reluctant to do this because i feel that house prices may have fallen even more by then. i think the cheapest option would be to sell in september, and continue paying 3 months mortgage at £600 a month, therefore it would only cost me £1800. is it possible to do this (i.e. continue paying the mortage, even though i have sold the house and then pay off all the balance when my introcutory rate ends in january)?

NO the mortgage must be redeemed once th house is sold so your only have 2 options: Delay the sale until the 31/12/2009 and in 99% certainly lose the sale -or_ pay the fee the only alternative is if you have a portable mortgage you can transfer this to a new house you biought on the same day. a mortgage MUST be secured on the property - you cannot have a mortgage without a properrty and you cannot sell a property without clearing the mortgage!

Powered by

We bought our central valley home in 04, interest only which expired in 08. we then refinanced to another interest only loan at 7.25% which rolls over in 2018. since 08, our financial circumstances have changed and making our payment is difficult. we have tried to refinance, but bofa says that unless we can come up with $65k, it will not be possible. we then requested that at minimum, our mortgage insurance premium be dropped which would reduce our payment by $140 but again we hear that our ltv prohibits this. we owe $256,500 and our home zillows around $195,000 (yes our bank tells us that they use zillow). we have never been late or missed a payment on any loan and have credit scores of 770 and 805. my friend who can afford his mortgage but simply does not like his terms, was told by his attorney to stop paying his mortgage in order to get the bank to take action, so to date he has not made a payment in 5 months, yet is living in his home and bofa is working to refinance his loan. i find this extremely unethical and it disgusts me to the point that i can hardly look at him. the obama bail outs did nothing for most ca home owners b/c most ltv are above the requirements even for those! is there any help for us that will not hurt our credit? missing a payment to get the banks attention is a non-option for us. the ignorant assumption that we bought a house that we could not afford is hardly worth addressing, and as i said we do not plan to default on our loan. i was raised by a very ethical grandfather who taught me that my word is my honor. we will do what we must, even if it means that we work 3 jobs each & rent out rooms.

Most people offering advice only go by what they read. When you're the one who is actually trying to go through the process it is quite different. I have associates who are doing what your friend is doing and at the end of the day, each one must look themselves in the mirror. More than likely you have a Freddie or Fannie, but you're right, if you owe more than the 105 or 110% value, there's not much you will be able to do; good credit or not. Your story emulates ours and many others. We are planning to move into our new home soon but in our case rather than eat such a huge loss, we will rent the house out until the market improves. No one knows what tomorrow holds, so just do the best that you can. Good luck.

Powered by

I'm currently on a 6.19% fixed rate mortgage and due to the massive cut in base rate i have been looking at my options and trying to see how i can use this to my advantage and save money. my current term is 2 years which expires in august 2010 and there is a penalty charge of £7,000. i spoke to my lender this morning and they offered to me to change to a 5 year fixed term at 5.2% and adding the £7,000 penalty charge to my mortgage amount. is there a better way of doing this? or is it a good idea? thanks

Unless your mortgage is close to £400,000 this is shocking advice from your bank and i would tell them to swivel. WIthout knowing how much your mortgage is I cant work out the exact figures but assuming your mortgage is the average (£150,000) in the UK a 1% drop in interest rates would save you approx £150 a month. Here are the two things you need to considers 1. Your mortgage expires in 19 months time so that £7,000 is the equivalent to £369.42 each month 2. But you will be adding £7,000 to your loan so you will be paying interest on that £7,000 for the remainder of your mortgage. Unless you are in a desperate place I would stick with what you have and look around in Aug 2010.

Powered by

The full details of the situation follow the first paragraph the time being of the essence extension deadline expires jan 7.we do not have a firm mortgage commitment in writing from the buyers from a lender yetthat is 6 banking days from now! also, if buyers want to do walk through they were given the option in contract to do it 48 hours before.that only gives us 4 days to get ready.we live out of state and need a full day for traveling. we will need time to get lodging, get paperwork from the bank in order like the payoff for our mortgage.we will need to have the tax adjustments,and fuel and other stuff essential to closing made available.the more i go over this in my mind the less likely closing seems to be able to happen! we want to know asap as to whether they are ready to close.their agent has only said"it looks very promising for them".how long does it take for a bank to approve a mortgage?they applied to this bank over a week ago.they have been at this for over 2 months! can we demand to get a mortgage commitment in writing by tomorrow? ***the following is the question asked prior with full details will we be entitled to the buyer's deposit? we are in contract to sell our home. the buyer's had a mortgage commitment contingency clause. the clause specifically stated that they had to get a mortgage within 30 days of contract signing. it also stated that they had to let the sellers know whether or not they obtained the mortgage within the 30 days or the contingency would be waived and the contract would be binding. if they gave notice that they couldn't they or the seller could cancel without penalty. they did not give notice and we found out they did get a mortgage but they didn't like the terms. also, because they didn't notify us they didn't allow us the option of canceling. they got another mortgage but again did not like the terms. our lawyers sent a time being of the essence letter. their attorney was upset. we then offered them an extension of the time being of the essence. now their lawyer is again upset cause they wanted an extension of the contingency. he is threatening on challenging this so they won't give up their deposit. it sounds to us that they have no intention of trying to get another mortgage because they just can't get the amount and rate that is acceptable to them. we heard through a reliable source that they have no credit history and are having concerns with the monthly payments that they will have. we don't want their deposit but instead really want to close on the house. however, after all is said and done we have paid an extra month's mortgage taxes, maintenance, fuel electric etc on this house. ( we have been moved out for over a year) there were also verbal promises of closing within the 30 days and that they were "good for the money" . we,again, gave them an extension for closing to get a mortgage but they are upset. it seems they wanted another mortgage commitment contingency! sounds like their now trying to get out of the contract without penalty? we will not be the ones to default. their lawyer told our layer they will challenge the extended time being of the essence . what a mess! we're hoping it won't come to that and we will close on the house. they have to understand that the market is killing sellers everyday. the longer our house is tied up in this contract the more chance we will not be able to sell at this price when they finally cancel! are we entitled to the deposit at least?

"Time is of the essence" means exactly that. If one of the parties to a contract with that stipulation cannot perform the terms by that date, then that party is in breach of contract. The remedy is breach of contract damages, which in your case is the deposit (presuming your contract states that the deposit is "liquidated damages.") (BTW, "Time is of the essence" only has an effect if it is in the original contract. It is meaningless in an after-the-fact letter.) If I were in your shoes, I would say enough is enough with these deadline extensions. I would say that if buyers want another extension, then they must pay $X for that option. But, that's just me. Suggest it to your lawyer. Verbal promises are pretty much meaningless. Get it in writing. Also, if they got a mortgage, then they met the financing contingency, which means they cannot back out on that basis. Unless, of course, the financing contingency laid out specific terms for the financing, and the buyers were not able to get a mortgage within those terms.

Powered by

I read the following nyt article in regard the housing slump. one part of the article, i did not understand. the author writes that millions of homeowners remain at risk of defaulting on their mortgages if they experience a payment shock because they owe more than their house is worth. can you explain how lower home value leads to a payment shock which leads to a default on a mortgage. assuming you have a fixed rate mortgage, whether the value of your home goes up or down, you still have the same monthly mortgage payment, right? so where is the payment shock coming from? thank you for your help. u.s. tackles housing slump the obama administration is ramping up talks on how to revive the housing market, which is weighing on the economic recovery—and possibly the president's re-election in 2012. last year, advisers considered several housing-policy prescriptions but rejected them in favor of letting the market sort things out. since then, weak demand and a stream of foreclosed properties have put renewed pressure on home prices, prompting concern within the white house. housing "hasn't bottomed out as quickly as we expected," president barack obama said at a white house town hall last week. mr. obama said housing remained the "most stubborn" problem facing the country and conceded that a raft of federal mortgage-aid programs were "not enough, and so we're going back to the drawing board." policy ideas include having taxpayer-owned mortgage giants fannie mae and freddie mac relax their rules for loans to investors, allowing those buyers to vacuum up excess housing inventory. in certain markets, fannie and freddie could hold some foreclosed homes off the market and rent them out to ease the property glut. officials also could sweeten incentives for banks to reduce loan balances for borrowers who are underwater, or owe more than their homes are worth. the white house is weighing ideas to strengthen the feeble housing market. pictured, emptying a foreclosed home in lawrenceville, ga., this year. discussions are in early stages, and there isn't consensus around particular ideas. a spokeswoman said the president and his advisers "are always looking at new ways" to strengthen the housing market but wouldn't disclose details. "while we continue to consider the options available to us, it would be inaccurate to say we are proposing any of these particular ideas at this time," white house spokeswoman amy brundage said. home-buyer tax credits worth up to $8,000 in 2009 and 2010 gave a short-term boost to home sales, but demand plunged after they expired. foreclosures have put pressure on prices and damped residential construction, traditionally an engine of job growth during economic expansions. "as conditions change, some options that were below the line the way the market was 18 months ago might be above the line today," said peter p. swire, who teaches law at ohio state university and until last year was a top housing adviser to the white house. most of the administration's housing efforts have focused on helping borrowers refinance or modify their loans to avoid foreclosure. but some economists say too many borrowers won't be saved through loan workouts and that the administration must do more to soak up the flood of foreclosures by boosting housing demand. view full image president obama's signature loan-modification program, announced during his first month in office, has lowered payments for around 600,000 borrowers. meanwhile, around four million borrowers are in foreclosure or have missed three or more consecutive mortgage payments. while mortgage-delinquency rates have fallen, millions more remain at risk of defaulting if they experience a payment shock because they owe more than their homes are worth. more recent housing relief has targeted unemployed borrowers. last week, officials said unemployed borrowers with loans backed by the federal housing administration could miss up to 12 months of payments while they look for new jobs. a separate $1 billion program is set to begin providing interest-free loans of up to $50,000 for temporarily jobless borrowers this month. unlikely to get congress to provide additional funds, the administration is left to examine options that it can implement without congressional consent. fannie and freddie, the so-called government-sponsored enterprises or gses, could be one policy lever. "there are a number of things that we can look at on the gse side," said austan goolsbee, departing chairman of the council of economic advisers. last year, officials considered a range of policies that included allowing borrowers with loans backed by fannie and freddie to refinance more easily by relaxing fees that lenders are charged for riskier borrowers. others outside the administration have pushed for fede

A couple of things: a) There are still millions of ARMs out there coming to maturity over the next couple of years. So a barely affordable payment on an 'upside down' piece of real-estate may no longer be affordable or practical when compared to walking away. b) Equity is the means by which people often measure their wealth and calculate the value of ownership vs. renting. If paying a mortgage for a property where there is no (or negative) equity exceeds the cost of renting, the decision to walk away becomes a valid option (from a purely selfish point of view). c) Often individuals will make sacrifices to keep their house (ownership) if they experience a bump in the road - layoff or reduced hours or medical emergency or similar. If they perceive that there is no residual or future value in such a sacrifice due to negative equity, they will again walk away rather than tough it out. Those are the three obvious reasons, anyway.

Powered by

Our current 6-month contract with a sellor realtor will expire in 2 weeks. the house is our previous residence 1000 miles away current home. we agreed to reduce the price during the selling period, but it won't work. we had quite a few interested and received a reasonable offer. we declined the offer because of a contingency term of selling their own house. regretted it now :<. if we sell at the current listing price we'll get 7 grants less than we paid 2 years ago after realtor commission. we wouldn't complain if we lose less than 10 grants. should we sign another 6-month contract with the current realtor or hire another one (don't know how difficult that would be because of the distance)? renting is an option since the monthly rent should easily cover the mortgage and december/january is a good month to rent. but we don't plan to rent it for too long. the downside for renting is uncertainty of the tenent. the upside is the hope of housing market recovery.

you can rent to own. You lock in the price of the house at your asking price today. Buyers come up with down payment. If down payment in short, then you apply some of their rent towards down payment. With the contract you both signed, you should give buyer 3-5 years to buy you out. Alot of people are unable to get a loan right now due to low credit scores. If they come in with good down payment and keep up there payments and it will give them time to rebuild there credit so they can get a loan to buy the house. If they don't keep up on payments then you evict and keep the down payment. But make sure you lock in the selling price.