When you are selling one property and buying another, you may be wondering what happens to your existing mortgage. Your mortgage broker in Tauranga can give you top advice on the different scenarios available to you and explain to you which is the best option for your situation.
Read on to learn more about whether it is a good idea to pay up your existing mortgage and take out a new one or if you would be better off transferring your mortgage with your property and keeping your account with your current financial institution.
Paying Up Your Existing Mortgage Loan
The general thinking is that you will have to pay up the balance on your existing mortgage once your house is sold and then take out a new mortgage for the new property. However, your mortgage broker in Tauranga can advise you if this is the best option for your situation.
There are fees and costs involved in paying up your mortgage early and in opening and closing mortgage accounts.
Taking out a new mortgage, however, does give an excellent opportunity to review the available options and rates. Your mortgage broker in Tauranga can search for a better rate across various institutions as they will not be locked into dealing with only one financial institution or bank.
Ask Your Mortgage Broker In Tauranga How A Portable Home Loan Works
Another option is to transfer your mortgage to your new property, thereby changing which property is held in security for your loan. Some financial institutions will allow you to port your loan to the new property and sometimes even offer a top-up loan to help you cover the cost of your moving expenses and renovations on the new property.
By transferring the property, you will avoid paying entry and exit fees. However, your mortgage broker in Tauranga will find out if any fees are involved in making the switch, and this will put you in a favourable position to make the right decision.
Suppose you are happy with your current financial institution or bank. In that case, you may like to investigate this option, as it will be convenient to remain with the company that currently handles your mortgage.
Get in touch with Simpler today to find out more about the option of transferring your mortgage when you buy and sell a property. Our experienced mortgage broker in Tauranga can give you top advice and find the simplest solution to help you get the best deal for your mortgage loan.