Understanding the nuances of mortgage portability can significantly impact your decision-making process when selling your current home and purchasing a new one. MCAP offers a range of portability options to provide flexibility and financial benefits to homeowners. This article will delve into the intricacies of MCAP's mortgage portability features, highlighting how you can leverage these options to your advantage.
What is Mortgage Portability?
Mortgage portability is a feature that allows you to transfer the remaining term and interest rate of your current mortgage to a new property. This can be particularly beneficial if you're selling your home midterm and wish to avoid penalties by carrying over your existing mortgage terms to your next property purchase.
Key Benefits of MCAP Mortgage Portability:
- Avoid Penalties: Port your remaining mortgage term and interest rate to your new property, bypassing the penalty for breaking your mortgage term early.
- Flexibility: Utilize the port option within 90 days, offering a bridge loan solution if your purchase precedes your sale.
- Inclusive Options: Ability to port an insured mortgage rate to an uninsurable purchase, along with a blend and extend option for current fixed rates.
MCAP's Port Options Explained
Port & Increase
- Minimum Increase: $10,000.
- Fixed Rate Options: Blend and extend back to a 5-year term, incorporating the penalty into the blend calculation without charging it on the payout statement. Not applicable for VRM or Fusion products.
- Current Rate Advantage: Opting for current rates reduces the penalty by 10%.
- Fees Waived: Reinvestment fee, if applicable, is waived.
Port & Decrease
- Terms Transfer: Transfer the remaining term, amortization, and current rate to the new property.
- Penalty Conditions: No penalty unless the new loan amount exceeds the 20% lump sum allowance, in which case, a standard penalty applies to the difference.
- Current Rate Option: Opting for current rates incurs a penalty, reduced by 10%.
- Fees Waived: Reinvestment fee, if applicable, is waived.
Straight Port
- Simple Transfer: Transfer the remaining term, amortization, and current rate with no penalty.
- Current Rate Option: Opting for current rates incurs a penalty, reduced by 10%.
- Fees Waived: Reinvestment fee, if applicable, is waived.
Additional Portability Insights
- Product Consistency: If currently in Value Flex, you must stay within Value Flex for port options.
- Closing Window: Purchase and sale close dates must be within 90 days to utilize port options.
- Fee Process: Full fees charged upon payout for sales closing first, with applicable penalty/reimbursement fees reimbursed accordingly.
- Non-Portable Products: Safeguard 2nd mortgage options are not portable.
Conclusion
MCAP's mortgage portability options offer a pathway to financial efficiency and flexibility when transitioning between properties. By understanding and utilizing these options, you can navigate your property sale and purchase with confidence, minimizing penalties and maximizing benefits. As always, these options are subject to change and depend on client and property requalification with MCAP.