Transferring a mortgage is possible as long as the loan is affordable. New borrowers will be treated as if they were starting a new loan for themselves. If your mortgage isn't affordable, you still have options even if your lender says no. An affordable mortgage will allow the borrower to transfer the mortgage even if he has not paid it in full. As long as your situation fits one of the exceptions mentioned in the pay-for-sale clause, another person can take over and take responsibility for the loan.
Mortgage transfers from lenders are quite common. Unlike the borrower's ongoing obligation to make payments, the lender only has to receive the payments and enforce the debt. Many lenders use third-party companies known as loan servicers to manage the receipt of payments. The servicer receives a fee for each payment it processes for the lender. Other companies, known as loan originators, are often in charge of the loan issuance process.
Everything may be handed over to a loan servicer after closing. Whether your mortgage loan is through a mortgage company or a bank, the transfer process usually consists of a set of several loans. Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation that has not been reviewed by Underwriting. To determine if you can transfer your mortgage, you'll need to see if you have an affordable mortgage. However, since you asked, here is more information on how and why lenders and mortgage servicers transfer mortgages. Before signing your new mortgage, you may want to make sure there is a transfer option if you think you may need to move again. If you are going through a divorce or an unexpected illness, you may not want to continue paying the mortgage if it is not reasonable for your situation.
Here's what you'll need to check to see if your mortgage is transferable and what to do if you can't do it. A “sell maturity” clause in most mortgages requires the borrower to repay the loan balance when they sell the home. Transferring your mortgage can definitely be an advantage for you, but sometimes getting a new one makes more financial sense. In the pay-as-you-sell clause, a lender may include some exceptions that allow you to transfer your mortgage to another person without first paying off the mortgage in full. Your other option is to cancel your mortgage and pay the penalty, which can be substantial with a fixed-rate mortgage, especially if there is considerable time left in the term. Even if your mortgage has a pay-for-sale clause and is not acceptable, there are certain circumstances in which your lender can approve a transfer. If the current rate is higher than your loan, it may be a good decision to take on the previous mortgage. After going through all of the steps of qualifying for a mortgage, applying for a lender, getting a loan approved, and closing on a new home, many homeowners are surprised when they receive notification that their loan will now be serviced by another company.
Compare Canada's top mortgage lenders and brokers in parallel and discover the best mortgage rates that meet your needs. By canceling your mortgage, you are no longer bound by the pay-for-sale clause and can donate or transfer your home.