No matter how great your mortgage rate is, the odds are you have a penalty for breaking it early. This could be a potential dealbreaker when it comes to putting your home up for sale or refinancing your current mortgage. Often, when a client takes a “basic rate” with their lender (a discounted rate special that certain lenders will come out with when they do their big splashy rate campaigns a couple times per year) there is an iron clad contract that comes with it. Most of these products are NOT portable upon sale and can have huge penalties to break.
Whether refinancing or selling, we can take reduce the penalty on your mortgage with no additional out of pocket costs to you!. Here’s how it works:
Our short term lenders come in with money to exercise the client’s yearly prepayment privledge, therefore reducing the amount they have to pay out of pocket for penalty. The savings are then split with the lender.
Here’s an example (and an actual client scenerio)
A client with a mortgage at 3.54% for a 5 year fixed rate opened in November 2013 has a penalty of $8075 on their $300,000 mortgage balance.
The lender allows 20% lump sum payments per year. Our lenders advance $60k to the solicitor to paydown the current mortgage a week prior to closing. The client now only has to pay penalty on $240,000 vs $300,000. The penalty is now reduced to $6515. This penalty plus the split to the lenders is disbursed through the solicitors office at close.
$8075-$1515= $1560 to be split with the client and the lender. So the total savings to the client would be $780!
Wouldn’t you rather put that money in your pocket instead of your mortgage lender’s?? For some of these basic rates the penalties are 3% of the balance to break on sale (not portable) so the penalties can really add up!
Submit a contact request and let’s get started!