Bridge Mortgage Advice Please | Mortgages | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
Bridge Mortgage Advice Please
June 24, 2016
5:27 pm
fabafter50
Member
Members
Forum Posts: 138
Member Since:
October 22, 2015
sp_UserOfflineSmall Offline

I have a question if anyone can help regarding a bridge mortgage.
We just sold our home which will be closing on September 30th/16. We take possession of our new home on Sept.15th/16. We have no present mortgage, but will need a bridge mortgage for the 15 days in between.
How would one go about finding the best rate? It doesn't seem as easy as searching for a regular mortgage rate.
Any advice would be most appreciatedsf-smile
Thanks in advance

June 24, 2016
7:33 pm
Norman1
Member
Members
Forum Posts: 2780
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Current home has no mortgage. How about getting a portable mortgage on the current home?

On September 15, port the mortgage to your new home.

June 25, 2016
7:06 am
fabafter50
Member
Members
Forum Posts: 138
Member Since:
October 22, 2015
sp_UserOfflineSmall Offline

Thanks Norman, never heard of it. I assume it would be simpler and somewhat cheaper?
There are quite of bit of fees with the bridge mortgage because of paperwork, would this be less?
Sorry I haven't had a mortgage for years, gratefully, but am kind of out of touch with this sort of thing.

June 25, 2016
7:45 am
fabafter50
Member
Members
Forum Posts: 138
Member Since:
October 22, 2015
sp_UserOfflineSmall Offline

I just realized, we won't have a mortgage on the new home, so we wouldn't be keeping it.
Luckily in this crazy market, we had a bidding war of 9 people and got much more than we could have ever hoped for. I guess the bridge is the only way to go, but will have to see who has the least fees as I know the banks hate them, all paperwork for a short time gain.

June 25, 2016
8:19 am
Norman1
Member
Members
Forum Posts: 2780
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Mortgage free. That's good! But, if you are not going to keep a mortgage on the new home, then that certainly changes things!

In that case, how about an open mortgage on the new home?

Open mortgages can be paid off anytime. Fiscal Agents has a survey here.

Unfortunately, there isn't much one can do about the legal fees. It costs the same to register a mortgage and then discharge it, regardless of how long one takes to pay the mortgage off.

As well, 15 days isn't a very long time for a lender to amortize its own fixed overhead for doing a mortgage. That's why one cannot get a bridge loan for 3% per annum. Keep in mind that 15 days of something like 8% is only 0.328% of the amount borrowed.

I would figure out the total cost (interest, legal fees, and discharge fees) of a bridge loan, an open mortgage, and a conventional one-year closed mortgage. Based on that, decide which route to go.

Please write your comments in the forum.