Picture yourself and your spouse living in a small townhouse. A year after you have your first child, you decide that it is a good idea to move into a larger house before you have more children. You start looking around and finally decide upon a house. Now fast forward to the packing process. There are tons of items that you have to ensure to pack up and move to the new house. All of the furniture, collectables, kitchenware, and everything in between have to be moved. However there is another thing that should be considered…your mortgage.
TD Canada Trust 2010 Repeat Home Buyers Report shows that about one third of home owners actually take their pre-existing mortgage with them when moving to a new house. There are a number of factors to consider before deciding whether or not it is a sensible idea to take your mortgage with you.
- Home Equity. You must determine how much equity is in your home. Also, consider your options if you still have a pre-existing home equity loan.
- Time frame in new house. If you are going to stay in this new house for the length of time that you have left on your mortgage, then it’s probably a good idea to take it with you.
- Check the current rates. If the mortgage rates offered are higher than what you are paying, take your old mortgage.
In any case, consult your mortgage broker to determine the best option for you.
