Posted on: 05th Jul, 2004 10:55 pm
Portable Mortgage is a type of mortgage, which can be transferred from one property to another. It is also known as mortgage on the move and Porta-mortgage.
Features:
Features:
- Flexibility - A borrower has the flexibility to buy one home and sell another home, even before his/her mortgage matures.
- Portability - A borrower is allowed to transfer his/her mortgage including rate and terms from his/her existing property to a new property.
- Cost Saving - It avoids the cost of taking out a new mortgage.
- Good Deal - It allows a borrower to avoid any rise in market interest rates that occurs, between the time he/she purchases one house and the time he/she purchases the next one.
- No Prepayment Penalty - There is no prepayment penalty.
- Benefit of Refinancing - Here, a borrower can get the benefit of refinancing, if the rate of interest decreases.
- Protection Device - It is an excellent protection device, as it protects the borrower when the rate of interest rises.
- Availability - It is available on loans from $60,000 to $1 million.
- Down payment - It is available to a borrower who makes a down payment of at least 20% of the property value.
- Lending Criteria - It is given by E-trade. E-trade offers this mortgage only to the borrowers with high credit ratings.
- Requires Registration - The borrower is required to register this type of mortgage, in the title of the new property.
Hello, with a portable mortgage, if I move my mortgage from one house to another (worth less $) do I still need to do a down payment on the new property?
Patricia August
Welcome to the forum.
The requirment for downpayment applies when you get the loan first time and it may not apply when you do the transfer.
One of the reason I say this is because, when you buy house second time and port your loan, if the price of that property is higher the lender will offer you second loan at the current market rate to cover the difference. So the reverse shoudl work the same way.
One catch with all this loan would be your interest rates will little higher than you conventional loans.
If your conventional loan rate is 5.5%then portal mortgage interest rate will be 6.5%
Welcome to the forum.
The requirment for downpayment applies when you get the loan first time and it may not apply when you do the transfer.
One of the reason I say this is because, when you buy house second time and port your loan, if the price of that property is higher the lender will offer you second loan at the current market rate to cover the difference. So the reverse shoudl work the same way.
One catch with all this loan would be your interest rates will little higher than you conventional loans.
If your conventional loan rate is 5.5%then portal mortgage interest rate will be 6.5%
if we buy a house worth 100, 000 more than the house we currently own and port our mortgage, what is the downpayment based on, the entire mortgage (300,000) or the difference between the first property and the second property (100,000)
it will be 20% of property value