In life, we face many incidents, and homeowners in Canada might want to sell their homes as they want to move to another city due to job relocation or job change, sudden job loss, or downsizing. Whatever might be the reason, Canadians do not have much choice but to break the home mortgage that means they have to face huge mortgage penalties.
If anyone breaks their mortgage before the term ends, it is essential to review the stipulations on your mortgage contract to see how much you have to pay for the penalties. Also, remember that mortgage penalties can exceed $10,000. However, there are some ways by which you can reduce your mortgage penalties.
What Do You Understand By Mortgage Penalties?
Mortgage Penalty Is The Fee That Your Mortgage Lender Charges When-
- You break the mortgage contract
- You pay more than the agreed additional amount of the mortgage
- Choosing to transfer the mortgage to another lender before the term ends
- Payback the full mortgage amount before the term ends that include when you are selling the home
The mortgage penalties can add thousands of dollars, so be sure to consult with the mortgage lender, who can provide you suggestions on reducing the number of penalties.
Know-How To Calculate The Mortgage Penalties
If you want to reduce the penalties, be sure to know how you calculate mortgage penalties. The mortgage penalty depends upon the following criteria- the interest rate differential or the three months interest. For example, If you break the variable rate mortgage, the penalty you have to pay is around three months of interest.
Mix The Current Mortgage With The New One
You can also blend the existing mortgage with the new one to reduce the penalty amount. It will help you to pay less for the mortgage if you face penalties in any case.
Negotiate with the lender
Now, if you can take help from the mortgage lender, you can also negotiate the amount for the same. You can discuss the needs with the lender to know how much the penalty amount can be reduced.
These are some of the ways to lower the mortgage penalty amount. You can take help from a Private Mortgage Broker in Vancouver who will guide you in the process. Flash Financial is your best assistant regarding any mortgage help.