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Mortgage services / Moving homes

Moving homes

Plan your next mortgage around both closing dates. Speak with Puneet Mann, a Mortgage Agent Level 2 in Brampton.

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Is this you?

01Selling and buyingSee how sale proceeds and your next mortgage fit together.

02Buying before your sale closesA gap between closing dates may call for temporary financing.

03Your mortgage term continuesCompare porting with the cost of paying out your mortgage.

04Moving up or downsizingPlan the new payment around the home and life you want.

How lenders see

A lender looks at your income, debts and available down payment, including equity you expect from the sale of your current home. A firm sale agreement helps document the proceeds and when they will become available.

The order of your closing dates matters too. If your purchase closes first, bridge financing may help cover the gap after your current home has a firm sale. Your existing mortgage may be portable, or paying it out may involve a prepayment charge.

Which lender fits?

A lenders: Banks and credit unionsSome offer bridge financing when a sale is firm. A portable mortgage may let you carry existing terms to the new home, subject to the lender’s rules.
B lenders: Alternative lendersMay assess income or credit under different rules for the new mortgage. Down-payment requirements, borrowing costs and terms vary.
C lenders: Private lendersOften offer short-term, interest-only financing at a higher cost. A realistic plan to refinance, sell or repay at the end of the term is essential.

A, B and C lending explained

The application process

Puneet’s Level 2 licence covers bank, alternative and private lending. These are the main stages of an application.

1Review both propertiesGather your income, debts, mortgage balance, expected net sale proceeds and both closing dates. Together, they show the equity available for the purchase and the amount you may need to borrow.

2Compare your optionsReview whether you can port your mortgage, the cost of paying it out and any need for bridge financing between closing dates. Compare these with the new mortgage’s payments, terms and total cost.

3Prepare for closingProvide the lender with firm sale and purchase agreements and your current mortgage statement. Review the new mortgage terms and meet any conditions before your lawyer completes each closing.

Questions people ask

What is bridge financing?

It is a short-term loan that can make equity from your current home available when your purchase closes first. It is usually repaid from your sale proceeds. Lenders commonly require a firm sale agreement; terms and costs vary.

Can I take my current mortgage with me?

Possibly. A portable mortgage may let you transfer your current balance, rate and terms to your next home, subject to your lender’s rules and approval. Ask how the closing dates and any change in the amount borrowed affect the cost.

What if I end my mortgage term early?

Paying out a closed mortgage before its term ends may trigger a prepayment charge. Ask your lender for the charge that would apply on your intended payout date, then compare the total cost of porting and taking a new mortgage.

Should I buy first or sell first?

Selling first gives you a firmer picture of your sale proceeds. Buying first lets you secure a property before your sale closes and may mean carrying two homes for a period. Your equity, budget and preferred closing dates all matter.

Can I qualify while I still own my current home?

Possibly. A lender will review your income, debts, current mortgage and the financing needed for the new home. A firm sale agreement helps document the proceeds you expect to use. How they are assessed depends on the lender and closing dates.

What documents will I need?

The lender sets the final list. Common starting points include: