5 Questions to ask before ever breaking your mortgage.

  So you're looking to "trade-up" or break your mortgage to enjoy these record low interest rates.? Not so fast, it could cost you  $1,000's more than any anticipated savings.

The KEY question is: How much will it cost YOU?

Get the answers to these questions from your current lender before you ever commit to trading up to a new home or breaking your mortgage:

1. You need to know what the penalties will be if you break or port your mortgage to another home. Know this before you ever sign a mortgage.
2. Can I port the mortgage to another home? Let’s say you have to sell your home, can that mortgage be transferred to the next property you buy?
3. Are you tied to the lender you signed your mortgage with forever? Some mortgages cannot be broken unless you sell your home.
4. What are the prepayment privileges on your mortgage? Large prepayment privileges will allow you to mitigate large penalties by making lump sum payments thereby lowering any penalty for breaking the mortgage prior to the end of its term.
5. How is the interest rate differential penalty calculated? This may be the most important factor. If the bank uses the qualifying rate or posted rate to calculate any penalty, it could cost you a bundle.

Steven Porter - REMAX Aboutowne Realty Corp.