Breaking a mortgage question

[jabjab]

Mu mother signed a 5 year fixed rate last year with CIBC. she had no intentions of moving at that time but my mother did make them aware that moving is within a few year time period.

Fast forward to now... I'm heavily considering building an infill with a builder and taking 1 half of it. What I'd want to do is once I secure a lot I'd like to put up my house for sale and then rent. I predict the process will take at least 1 year to complete.

What are the usually fees when breaking a mortgage from selling? I called CIBC and they didn't know and said they would get back to me but their service is worst I've seen. It's taken over a month and a half to even get me access to my HELOC.

[ExtraSlow]

Use a mortgage broker for the new place, and have them calculate the break fee from CIBC. There's a good one one beyond.

[Tik-Tok]

Lol. Last time I called CIBC about the same thing (to see if it was worth it with the new lower rates), the girl told me after about 5 seconds what I would owe.

You can't port the mortgage somehow to a construction one ?

[Team_Mclaren]

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I signed a 5 year fixed rate last year with CIBC. I had no intentions of moving at that time.

Fast forward to now... I'm heavily considering building an infill with a builder and taking 1 half of it. What I'd want to do is once I secure a lot I'd like to put up my house for sale and then rent. I predict the process will take at least 1 year to complete.

What are the usually fees when breaking a mortgage from selling? I called CIBC and they didn't know and said they would get back to me but their service is worst I've seen. It's taken over a month and a half to even get me access to my HELOC.

If it's fixed, usually its calculated by IRD (interest rate differential). Compare your contract rate to current offering.

[ThePenIsMightier]

Ok, so the battery is still outside and frozen, but you're scared to put the charger on it?
Hang on... Maybe my wires are crossed, here.

[killramos]

Breaking a brand new 5 year fixed mortgage. Better pucker up cause where you are going there is no lube.

[ExtraSlow]

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Ok, so the battery is still outside and frozen, but you're scared to put the charger on it?
Hang on... Maybe my wires are crossed, here.

You was phone

[jabjab]

I definetly need to deal with more competent banking institution or go with a mortgage broker, lesson learned. Seems like everything is taking forever and their staff can't answer my questions in a timely manner.

I wonder if this scenario is possible:

Take the needed downpayment from my HELOC and qualify for the new place (yes i'm preapproved). List my current home for sale (hopefully it sells fast) and live in the new place till I get the permits and what not which would extend the length of my mortgage and thus reducing the ass raped i'll get on the breakout cost.

[sabad66]

You may be preapproved now, but if you put a big chunk of cash on your heloc you may not be approved on the final application. Just something to watch out for.

One thing you could do is put an offer on a new place but put a condition that you need to sell your old place. Although that might not be feasible these days now that it’s a seller’s market.

[bjstare]

Ready, fire, aim.

[gmc72]

We were half way through our 5 year term when we sold, and it would have cost us $11,000. Thank goodness we increased the mortgage at a higher rate (I know it's stupid), so they waived the fee. This was with BMO though, so CIBC might be different.

[jabjab]

Yes, I called another rep and they said it would be 14k penalty. The shitty thing is that at the time my mother signed the renewal she had told the agent about a potential move although its not happening right away it will happen within a year perhaps. I should have educated myself and went with her to make sure the details of the mortgage were taken care of.

I'm chatting with other banks and they were surprised the mortgage person at cibc locked her in at 5 years when she told him that moving is in the future just not right away. We have since transferred land to solely myself as she is getting old and wants me to handle things. Going to another institution now might be an option as a few have indicated they are will to cover some fees if i break. She has been with cibc since 96, you'd think they would give better service....

Oh and to top it off, the other rep i asked to talked told me he doesn't even see my HELOC on the profile...what a horrible bank.

[2Legit2Quit]

Common sense comes into play if there's any chance of moving/selling and you're signing a fixed 5 year mortgage.

[msommers]

I looked into this as I've got maybe 2 years left of the 4 year with Scotia on a fixed...the penalty was staggering. Sucks when I see rates dropping way more than I ever expected.

[ExtraSlow]

Wow, variable rate is cheaper, and as an added bonus, cheaper.

[jabjab]

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Common sense comes into play if there's any chance of moving/selling and you're signing a fixed 5 year mortgage.

Yes unfortunately my mother's lack of knowledge (English 2nd language) and lack of knowledge of the person who helped her at the time is biting me in the ass.
Was just chatting with my mother and she seemed surprised as the banker told her signing the renewal won't effect her when moving. There is a break down in between the bank and her.

[TomcoPDR]

Sucks to hear.

Consider putting her with someone at cibc that can offer same mother tongue language. Look into switching to TD, IMO much better bank over all

[alex9119]

I would look into porting the mortgage, spring is here all major banks are now offering cash back incentives if you decide to move to another institution.

[Xtrema]

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Yes unfortunately my mother's lack of knowledge (English 2nd language) and lack of knowledge of the person who helped her at the time is biting me in the ass.
Was just chatting with my mother and she seemed surprised as the banker told her signing the renewal won't effect her when moving. There is a break down in between the bank and her.

Very typical in retail banking. Even worst if they hired minority to focus on business from minorities with lower education and understanding. They don't care really, they just fill their quota to not get fired and move on.

At some point (seems to be 70+ for most) are incapable to handle these kind of planning as their minds starts to slow and goes. it's too late for this case but you should get involved more in these decisions.

And yes CIBC is the worst bank to deal with. Had horrible experience with them in the 90s and never looked back.

[jabjab]

Yes, CIBC has left a sour taste in my mouth. I've asked to speak to a branch manager but still waiting for a call back. I've taken over my mother's finaces over the last few months so this kind of stuff doesn't happen.

Technically in talking with other lenders they mostly would be willing to offer a cash back incentive for my business which will help with the breaking the mortgage. I was going to CIBC for the 2nd home purchase but that's not going to happen. I guess now they have lost out on 2 mortgages, perplexed how they run their operation there.