Switch to Variable or Stick with 5.00% fixed
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Posted on: 24-02-09 12:23:38
Pramod- thanks for the clarification. I have sent you a PM
Quote:
Originally posted by Blue_Peafowl
We have house on two names :
Me and my brother ( 50/50)
Now I want to remove my name and transfer mortgage to my brother’s name – with same bank
Only catch is I am going to add extra 35-40 k when I transfer to his name – I need my share
What is the best solutions ?
When we transfer mortgage from our name to only my brother name – we have to break contract? – is it new contract or we can go with same interest rate (which is prime -.75) or we have to take current mortgage rate which is prim+.8
Do we have to pay penalty? Since we gonna stick to same bank
Since you are going to remain with your present lender, it would be better if you ask these questions to them as they would be the one who would be in best position to answer your questions. However, I will try to answer a couple of questions.
It seems that you and your brother are presently both on mortgage and title with tenants-in-common. Now, if you remove your name from the mortgage then the bank would have to see if your brother alone would qualify based on his income and credit or not. If he qualifies and you do not increase the mortgage amount and all conditions remain as it is, then the bank may allow you to come out of mortgage and you would still need lawyer's services to remove your name from the mortgage and title and you may be able to keep the same rate.
However, if you want to take money out and add it to the mortgage, then it could be like breaking your existing contract or may be depending on your bank, they could treat the extra money as a second mortgage (second portion) and only that money could be at extra rate of interest, otherwise all the amount of mortgage could be on new rates, with new terms and new product and there could be penalties as well.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Hello Pramodji,
Here is my situation and I hope what I understand is correct. I am paying 5.10% rate for now. I have paid off 80% of my home mortgage. There is no point at this time switching the mortgage. I would have paid this off in next 1-1/2 to two years. What if I get a HELOC for the amount at current rate (may be next month after more interest rate reduction) and pay off the mortgage. That way I get lower rate and there is no limit how much I payoff on the credit. If this is correct, do I go to my current lender for HELOC or a new lender? Would it make difference if I go to new lender?
Thanks in advance
Quote:
Originally posted by ash_canada
Pramod- thanks for the clarification. I have sent you a PM
Replied to your PM. I hope you got some of the answers.
Cheers.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by Ranin
Hello Pramodji,
Here is my situation and I hope what I understand is correct. I am paying 5.10% rate for now. I have paid off 80% of my home mortgage. There is no point at this time switching the mortgage. I would have paid this off in next 1-1/2 to two years. What if I get a HELOC for the amount at current rate (may be next month after more interest rate reduction) and pay off the mortgage. That way I get lower rate and there is no limit how much I payoff on the credit. If this is correct, do I go to my current lender for HELOC or a new lender? Would it make difference if I go to new lender?
Thanks in advance
Hi Ranin,
Your understanding is correct as you would not have much benefit in switching the mortgage right now. However, when you ask for a HELOC from your present lender or from any other institution, it would be considered refinancing. You would (may) have to get yourself re qualified and there could be appraisal and legal fees. And, if you borrow from HELOC to pay off your mortgage completely then there could still be some penalties. You can borrow from HELOC and pay only what is allowed without penalties and then increase your payments and use the double up options, if at all there, and you can clear your remaining mortgage in no time.
I do not know which lender you are currently with, and what rate they would offer you. Most likely it would be prime + 1 but you may negotiate. Also, are they willing to eat out costs of appraisal and legal fee partially or completely. However, if they are not willing to cooperate and ask you to pay penalties and costs, then you should leave that lender and go to some one else. If you like, You can send me a quick PM with your details and I would reply back with some options.
-----------------------------------------------------------------
Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by Pramod Chopra
Quote:
Originally posted by Ranin
Hello Pramodji,
Here is my situation and I hope what I understand is correct. I am paying 5.10% rate for now. I have paid off 80% of my home mortgage. There is no point at this time switching the mortgage. I would have paid this off in next 1-1/2 to two years. What if I get a HELOC for the amount at current rate (may be next month after more interest rate reduction) and pay off the mortgage. That way I get lower rate and there is no limit how much I payoff on the credit. If this is correct, do I go to my current lender for HELOC or a new lender? Would it make difference if I go to new lender?
Thanks in advance
Hi Ranin,
Your understanding is correct as you would not have much benefit in switching the mortgage right now. However, when you ask for a HELOC from your present lender or from any other institution, it would be considered refinancing. You would (may) have to get yourself re qualified and there could be appraisal and legal fees. And, if you borrow from HELOC to pay off your mortgage completely then there could still be some penalties. You can borrow from HELOC and pay only what is allowed without penalties and then increase your payments and use the double up options, if at all there, and you can clear your remaining mortgage in no time.
I do not know which lender you are currently with, and what rate they would offer you. Most likely it would be prime + 1 but you may negotiate. Also, are they willing to eat out costs of appraisal and legal fee partially or completely. However, if they are not willing to cooperate and ask you to pay penalties and costs, then you should leave that lender and go to some one else. If you like, You can send me a quick PM with your details and I would reply back with some options.
I have sent you a PM. Thanks a lot
Hi,
My mortgage renewal is due in July, 2009. Today I went to my bank and asked what possible rate they can offer my because I started shopping for the good rates.
He gave me 4.39 fixed for 5 years but said it's still five months left in your term bank will charg about 2500/= plenty.
After some more discussion, he said he will talk to Bank mortage dept (as he is not authorized) to fix this rate (4.39) for you until MAY and you can renew your mortgage without any plenty. He will let me know in day or two.
Is 4.39 fixed for 5 years is good. Are people getting better rate then this?
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