4 October 2010

And today most prime mortgages are portable.

•    49% are going to upgrade when they decide to buy their next house.
If you plan to buy a more expensive property during your mortgage term, it’s necessary to make sure your lender provides you with fully discounted rates on ports and increases. The deal is that sometimes people who port and increase sometimes get just a subpar discounts, because the lender understands the client has no other penalty-free choice. 

•    21% are going to take the maximum mortgage they can qualify for.
In case of people under the age of 40 it’s even about 28%. It’s always important to remember that you have to be ready for certain monthly payments. Another thing to pay attention to is your gross debt service ratio – it shouldn’t be more than 32%.

•    72% don’t think about changing their lender in case of a new home purchase.
The main reasons for switching lenders were: better rates (60%), better customer service (33%), and better mortgage terms (28%). If you are satisfied with your lender’s rates and customer service, that’s great. But you shouldn’t hurry with your decision. There’s always a possibility that there are even more attractive rates and terms at the market.  

•    60% don’t know about their portability or assumability options.
The porting option allows you not to pay any penalties if you move. Assumability helps you even more. First of all, you can offer a low mortgage rate as a selling feature which will make your house more attractive for buyers. Another benefit is that you can avoid a penalty if you’re selling the house and you need to break your mortgage.

•    Only 1 in 3 port their mortgage when buying a new home.
If you have a mortgage and buy a new home, it’s always better to ask your mortgage advisor whether the porting can save you money.

•    Only 8% of home sellers offer an assumption.
The reasons for that can be various:
1) Sellers don’t know about such an option.
2) Today rates are lower and it can make the assumption variant less attractive.
3) Or the sellers can port their mortgage to their new property. 

•    84% are going to sell their current property before purchasing a new one.
In case you want to buy a new property before you sell your old one, you should get prequalified.

•    Two-thirds plan to choose accelerated payments for their next mortgage.
It’s quite profitable if you can afford accelerated bi-weekly payments – as a result, your amortization can decrease from 25 to 21 years.

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