Breaking a mortgage question

[ExtraSlow]

jabjab, also chat with a broker, not just another retail bank. Seriously. the service will be night and day better and the advice is free.

[jabjab]

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jabjab, also chat with a broker, not just another retail bank. Seriously. the service will be night and day better and the advice is free.

Totally and it seems like they really fight for your business, especially the ones on 100 percent commission.

[Tik-Tok]

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jabjab, also chat with a broker, not just another retail bank. Seriously. the service will be night and day better and the advice is free.

"HELOC! Get your HELOC here! A HELOC for everyone! But why DON'T you want a HELOC????" -Every broker I've ever talked to

[ExtraSlow]

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"HELOC! Get your HELOC here! A HELOC for everyone! But why DON'T you want a HELOC????" -Every broker I've ever talked to

Weird, my last mortgage with a broker he didn't mention a heloc once. I actually don't even have one any more because of it. Guess I can get one if I need it.

[dirtsniffer]

Any reason to not open a heloc if it's available? Access to credit seems like a good thing

[ercchry]

^^^there use to be no downside, but lots of lenders are moving to calculating your TDS based on limit vs balance now... revolving credit is traditionally calculated at a monthly payment of 3% balance.

For secured credit over $50k it can actually be amortized at benchmark... but moving to a limit vs balance rule can be a huge change for qualifying for a second home/rental

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"HELOC! Get your HELOC here! A HELOC for everyone! But why DON'T you want a HELOC????" -Every broker I've ever talked to

I dunno why they would care... most lenders only pay commissions on the balance that is carried within the first few months

In this specific case, you’re better off with CIBC moving forward. Pay the fee, then you will get it back if you get a new loan of equal or greater value within 6 months

*not advice... but fuck cibc, so here is what you for sure, legally are not allowed to do...

Find a lot with an existing house, put in a conditional offer based on selling your place... port mortgage, get a second to finance the build... once completed, refinance original loan to pay out the second, call up a broker when renewal rolls around and move to a new lender

For the record, fixed terms with big banks will always fuck you on a 5yr... all banks have inflated, out of market “posted rates” and their 5yr terms are “special, discounted rates” so when they go to calculate the IRD they say you received this massive discount when you signed and use the posted rate, vs the low market rate for whatever term they offer that’s closest to what’s remaining... always resulting in a huge IRD

If you want fixed, you need to pick a monoline
If you are hell bent on sticking to a big bank, variable every time

[jabjab]

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^^^there use to be no downside, but lots of lenders are moving to calculating your TDS based on limit vs balance now... revolving credit is traditionally calculated at a monthly payment of 3% balance.

For secured credit over $50k it can actually be amortized at benchmark... but moving to a limit vs balance rule can be a huge change for qualifying for a second home/rental



I dunno why they would care... most lenders only pay commissions on the balance that is carried within the first few months

In this specific case, you’re better off with CIBC moving forward. Pay the fee, then you will get it back if you get a new loan of equal or greater value within 6 months

*not advice... but fuck cibc, so here is what you for sure, legally are not allowed to do...

Find a lot with an existing house, put in a conditional offer based on selling your place... port mortgage, get a second to finance the build... once completed, refinance original loan to pay out the second, call up a broker when renewal rolls around and move to a new lender

For the record, fixed terms with big banks will always fuck you on a 5yr... all banks have inflated, out of market “posted rates” and their 5yr terms are “special, discounted rates” so when they go to calculate the IRD they say you received this massive discount when you signed and use the posted rate, vs the low market rate for whatever term they offer that’s closest to what’s remaining... always resulting in a huge IRD

If you want fixed, you need to pick a monoline
If you are hell bent on sticking to a big bank, variable every time

That was what I was thinking but unfortunately the way homes are going, I highly doubt a seller will agree to that condition cause the next guy in line will probably have zero conditions, particularly if its a home zoned R2. Going forward, I'll never go with a big bank again going forward.

[jabjab]

Alright, finally got through to a branch manager. Turns out my penalty is only $2,400 if I break it today, not sure how the other CIBC banker came up with 14k (and he was a mortgage "specialist").

Turns out that if I apply for a mortgage on my next property with cibc I have 3 months to sell my current house where that mortgage can replace the one I get with the new property to avoid any penalty whatsoever

[ExtraSlow]

I once got hit with a 6500 mortgage break fee, despite getting a new and larger mortgage with the same bank, and the fucking drones at TD couldn't even explain their own calculation to me. Like they couldn't show me the numbers that went into it. They also couldn't explain why I got the fee despite verbal assurances that I would not. Of course, they got their money out of the lawyer payout before I got wind of it, so there was nothing I could do. Most frustrating experience of my life. TD made a solid enemy there.

[cyra1ax]

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Alright, finally got through to a branch manager. Turns out my penalty is only $2,400 if I break it today, not sure how the other CIBC banker came up with 14k (and he was a mortgage "specialist").

Turns out that if I apply for a mortgage on my next property with cibc I have 3 months to sell my current house where that mortgage can replace the one I get with the new property to avoid any penalty whatsoever

Is $2400 the amount of 3 months interest?

[jabjab]

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I once got hit with a 6500 mortgage break fee, despite getting a new and larger mortgage with the same bank, and the fucking drones at TD couldn't even explain their own calculation to me. Like they couldn't show me the numbers that went into it. They also couldn't explain why I got the fee despite verbal assurances that I would not. Of course, they got their money out of the lawyer payout before I got wind of it, so there was nothing I could do. Most frustrating experience of my life. TD made a solid enemy there.

I would have taken it higher than the branch tbh, that is bullshit. No wonder my TD stock keeps doing well. I locked in at a lower rate and the rates have increased to what they are offering now so I believe that is why my penalty is lower but I'm still scratching my head where the specialist got 14k and the branch manager got 2400.

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Is $2400 the amount of 3 months interest?

I believe so when i do the rough math.

[ExtraSlow]

It was a long time ago. But I've always been a cream puff.

[ercchry]

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I would have taken it higher than the branch tbh, that is bullshit. No wonder my TD stock keeps doing well. I locked in at a lower rate and the rates have increased to what they are offering now so I believe that is why my penalty is lower but I'm still scratching my head where the specialist got 14k and the branch manager got 2400.

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I believe so when i do the rough math.

It’s going to come down to posted vs contract rate and also current offered rates for whatever is closer to what’s left... could also be a perfect storm of the dates and current increase in rates aligning and no one is actually wrong. Impossible to say without the details, but there is a reason why brokers won’t give you an estimate, and tell you to get the numbers straight from the lender

[cyra1ax]

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I would have taken it higher than the branch tbh, that is bullshit. No wonder my TD stock keeps doing well. I locked in at a lower rate and the rates have increased to what they are offering now so I believe that is why my penalty is lower but I'm still scratching my head where the specialist got 14k and the branch manager got 2400.

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I believe so when i do the rough math.

So I was reading on RFD/Reddit this past weekend, people are doing a blend&extend + break/move to new vendor on their fixed rate mortgages in order to get the lower rates that are available today. Basically sounds like what you're looking to do. CIBC is apparently the only big bank that will allow it, the other ones have different calculations that end up blending the IRD into the new mortgage which makes the whole endeavor not worth it.
The reason I asked about the 3 month thing is because that's what people have been paying as a break fee instead of the IRD, which would be that 16k that you were quoted from the other person.

[mr2mike]

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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.

Lol yeah other banks "are shocked they did this" but they'd do the same fuckin thing. Trust me. It's in the bank's best interest to lock you in for guaranteed interest payments.
I'm actually surprised the penalty isn't closer to $20k. Must be the lower interest rates.

[ercchry]

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Lol yeah other banks "are shocked they did this" but they'd do the same fuckin thing. Trust me. It's in the bank's best interest to lock you in for guaranteed interest payments.
I'm actually surprised the penalty isn't closer to $20k. Must be the lower interest rates.

If they are lower, then that’s when you get IRD... the whole point is the bank gets the agreed upon return for the agreed upon term you signed, if they can only lend your 2% money for 1%, you have to cover the difference... fair, but the banks fuck you by posting inflated, above market rates and offer a discount from this... so they can claim your 2% money was actually 3% money, that’s now 1% money