When you sign up for the 5-year term option on your mortgage, you assume that the 5 years will pass with no incident.
Life happens and sometimes we don’t have a plan for it. While not all reasons for breaking a mortgage are happy , there are occurrences that can happen in the next five years which you cannot plan for. This is why most people signing a mortgage end up paying penalties.
Mortgage penalties can range anywhere from $2,000, all the way to $16,000 depending on the bank and the amount of your mortgage.
Potential reasons for breaking your mortgage:
If you’re struggling under a large amount of debt at a high interest rate, it might be beneficial to add that amount on to your mortgage, pay off your debt with that money, and have the debt tied into your mortgage at a rate which is more reasonable.
Need For Renovating Your Home
If the house you bought isn’t turning out the way you planned and you need to remodel certain parts but don’t have the money, adding an amount on your mortgage to re-do the kitchen, fix the leaky roof, and even add in an extension can all be obtained by adding onto your mortgage.
In the Event of a Divorce
If you need to sell/move out of your house, you’re going to have to break your mortgage. As you would probably be going through a painful time during this horrible circumstance, the last thing you need to be thinking about is the headache of paying the penalty to break your mortgage.
Let us handle this for you.
This is probably the best reason on the list! If you or your partner are about to have a baby, this is a time to redo your mortgage. You might need a different payment schedule now that maternity/paternity leave is on the horizon and there are baby expenses on the way!
Getting Laid Off/Change of Job
Unfortunately, this one of those things we cannot often foresee. If this happens and you’re in a tough circumstance where the current mortgage payment schedule is not working for you, it is time to make a mortgage reschedule that does.
Moving to a New Home
Whoops! You just bought a home and something didn’t work out. Your work location has changed or your house isn’t as great as you thought it was. If you move to a new home, unless you have a portable mortgage, you will have to break yours and get a new one.
Investing or Starting a Business
Have some big plans so you need some spare cash? It might be time for a refinance.
THINK ABOUT THIS:
TIP: A ‘refinance’ (ex: redoing your mortgage) is still breaking your mortgage. Anything that changes the original terms you signed is considered breaking your mortgage. You can be charged a lot of money for this by banks or other mortgage planners who didn’t plan your mortgage properly.
Don’t be charged a lot of money for a common life event. Call us today and let us talk you through the process.
Connect with us Facebook
Darryll Esch – Appointment Booking
Stagers, renovators and drones: Not everyone loses in a down housing market
Dividing lines between credit unions, banks blurring, but key differences remain
October home sales down 1.6 per cent compared with September: CREA
Syracuse profits by handwriting thousands of late-tax notes
Canadian banks raise prime rates after Bank of Canada interest rate decision
RBC, TD, CIBC and BMO raising prime rates following Bank of Canada decision
5 Haunting Mortgage Secrets to keep you up this Halloween Night!
The decision to downsize can be a dilemma
CMHC forecasts ‘moderation’ in Canadian housing market over next two years
- Darryll Esch – Appointment Booking
- Stagers, renovators and drones: Not everyone loses in a down housing market
- Dividing lines between credit unions, banks blurring, but key differences remain
- October home sales down 1.6 per cent compared with September: CREA
- Syracuse profits by handwriting thousands of late-tax notes
5 Mortgage Secrets1 year ago
5 SECRETS THE BANK DOESN’T WANT YOU TO KNOW ABOUT YOUR MORTGAGE
Buying a Home5 months ago
6 Reasons to be Pre-Approved for a Mortgage Early
Finance4 months ago
When is a Variable Rate Mortgage the Smart Choice?
Home Page7 months ago
Central bank raises key metric used to determine mortgage eligibility
Buying a Home7 months ago
3 Documents You Didn’t Know You Need for Your Mortgage Approval
5 Mortgage Secrets9 months ago
THE PENALTY COVER UP Mortgage Secret 3 of 5
5 Mortgage Secrets9 months ago
THE POSTED RATE SCAM Mortgage Secret 2 of 5
Buying a Home6 months ago
5 Steps to a Guaranteed Mortgage Approval