What is a Grandfathered Transfer?

What is a Grandfathered Transfer?

If you purchased your home before November 30, 2016…. then this is a must read about your mortgage renewal options. Under the old mortgage rules, you can still qualify to switch your mortgage to another lender. This is called a grandfathered transfer. We get a lot of questions about the rules and what options clients have when switching or transferring their mortgage to another lender at renewal time.

When it’s time to renew your mortgage, you can stay with your existing lender or switch your mortgage to a new one competing for your business. In order to switch your mortgage to a new lender, you must re-qualify under today’s mortgage rules. Unless you purchased your property prior to November 30, 2016, and have not changed your original mortgage terms (for example, re-financed your mortgage to take out equity.) This means on switches for a fixed term of five years or more, we can use the contract rate to qualify you!

Can an existing amortization be greater than 25 years for a grandfathered transfer?

Yes! If the original purchase/refinance was funded prior to Nov 30, 2016, the remaining amortization may be used even if it is greater than 25 years. Even if a mortgage has been pre-paid and the amortization was reduced, we can use the remaining original amortization.

If you purchased your home after the November 30th, 2016 mortgage rule update, you still have the option to switch lenders and shop your mortgage, you would have to qualify using today’s rules.

Simply renewing your mortgage term with your bank or existing lender is not always beneficial. You are stuck with selecting one of their renewal rates. Because banks know you have to re-qualify, their renewal rates are not as competitive. Mortgage renewal time is a great opportunity to revisit your financial goals and ensure you are renewing your mortgage with your future needs in mind.

The Mortgage Centre has access to a number of lenders that provide a wide range of mortgage products and terms to choose from, including major banks, credit unions, mortgage companies and private lenders. Our affordable mortgage options will help you achieve your financial goals and save you thousands of dollars. We would be happy to let you know what your options are when it comes time to renew your mortgage. Keep your current mortgage lender honest and shop your mortgage. We provide a free service; contact us today.

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