Personal Finance

Advice needed on buying new home with two existing mortgages and homes

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  • Jun 24th, 2014 6:59 pm
Sr. Member
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Jul 19, 2003
778 posts
106 upvotes
Markham

Advice needed on buying new home with two existing mortgages and homes

Life changed and I got married
- wife has a 240K mortgage term ending October 2015 with TD on a condo. We currently live here
- I have a mortgage amount of 210K on a $360K approx market value condo with term ending May 2016 with CIBC.

I want to buy a house now for 700K and I need a downpayment of 140K (20%)

Problem 1 is I don't have the full cash for the down payment.

If we sell the wife's condo do I have to plan the closing dates so that I can port my mortgage over to the new property if I don't want to cancel and pay penalty? I understand I may need to apply for bridge financing if we buy before we sell. But how can you get approved bridge financing without a firm sale? If I like and want to offer on a house I won't have the down payment unless existing wife's condo is sold so we should really sell the condo first before we can look to buy a place? Then get bridge financing?

To address the lack of funds, what if I refinance my condo for 80% of the appraised value @ 360K so I can take $72K to help with downpayment? I will then get a blended rate and NOT extend the term? And then continue renting condo and wait until mortgage term ends in May 2016 and get an open mortgage and sell the condo then? I believe CIBC said they would waive the appraisal fees plus another fee in the interest of winning my future mortgage business on the new home.

Then I would have enough for a down payment and not be stressed about quickly finding a buyer for the wife's condo.

Does this sound reasonable? I'm just not sure what people do when they want to upgrade to a larger home while still in a closed term mortgage i.e sell first and then quickly buy ASAP or try buy first then list exisitng home on the market? To buy first I would need a down payment and hence I thought about refinancing my mortgage.

Thanks very much for any advice. I started sending these questions to my CIBC financial advisor but I wanted to get more advice from the smart people here.
4 replies
Deal Fanatic
Jan 11, 2004
5000 posts
611 upvotes
Victoria
Pretty sure the bridge financing is only approved if you have an unconditional sales contract so you'd have to be sold first. It's for situations where the closing dates don't match up. For porting I know with TD they say you have 90 days from the sale but I did get them to do a "port" where the closing was 6 months after the sale of the other property so you never know.
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Dec 3, 2013
256 posts
42 upvotes
As a mortgage agent my biggest concern from the above scenario is the affordability of all 3 properties. I understand you have the intention to slowly get rid of the other two but that does not help you. If you do not have the income to afford all 3 mortgages every month there is a good chance this deal does not get done. It would hinder you even further if you refinanced one of the mortgages to come up with down payment for a new house.

My suggestion is to sell first and get a property or two off the books. Then buy the bigger home you are after.

As for your wife's condo you can only port to TD. So unless you want to keep them attached to that property there will be penalties for breaking the mortgage and a discharge fee.

Without looking at your file it is difficult for me to offer any more insight. Also, please take what the bank tells you with a grain of salt.
Sr. Member
User avatar
Jul 19, 2003
778 posts
106 upvotes
Markham
Thank you for the advice.

Yes I want to sell one first and then move to another meanwhile keeping the rental condo if possible as it's paying for itself.
Banned
Nov 27, 2006
2200 posts
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Toronto
professor24 wrote: As a mortgage agent my biggest concern from the above scenario is the affordability of all 3 properties. I understand you have the intention to slowly get rid of the other two but that does not help you. If you do not have the income to afford all 3 mortgages every month there is a good chance this deal does not get done. It would hinder you even further if you refinanced one of the mortgages to come up with down payment for a new house.

My suggestion is to sell first and get a property or two off the books. Then buy the bigger home you are after.

As for your wife's condo you can only port to TD. So unless you want to keep them attached to that property there will be penalties for breaking the mortgage and a discharge fee.

Without looking at your file it is difficult for me to offer any more insight. Also, please take what the bank tells you with a grain of salt.

Look we dont know OPs income

But here is some numbers:

condo 1: $360,000 @ 80% = 288000 - 210000 = $78,000 avaialable - if cibc lets you add another mtg, which I dont think they do. you might wnat to look at rbc or scotia for their equity plans. RENT THIS property.
condo 2 $240,000 / unknown value = RENT THIS PROperty.

buy principal residence. Priamry residence. 10% down, or whatever cash you have. should be able to get cmhc because its your primary. but i could be wrong, i haven't done a cmhc mortgage is ages.

$630,000 + $288,000 + $240,000 = 1,158,000

should be do able assuming both properties can net about $1500 in rent and you have joint income of near $200,000

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