Personal Finance

Odd situation with ING Direct mortgage

  • Last Updated:
  • Jul 30th, 2009 8:02 pm
Deal Expert
May 17, 2008
15134 posts
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Un4GivN wrote:
Jul 29th, 2009 8:31 pm
It's not a matter of 'getting my way' ... I don't want to break the mortgage or anything, I just want it ported to my new house. It amazed me that they have never come across a customer with an existing mortgage who then wanted to purchase a brand new home. I did manage to speak with a manager at ING Direct and they said they are able to accommodate me. Thanks for all the replies...seems much more difficult than it should be.
Glad to hear you figured this out.

Two questions though, how do you "port" a mortgage? I would have thought that since it is a loan for a different amount with different collateral, it would require a separate agreement.

Also, when exactly are you paying for this new house? Do you need to give him the money before you build, or are you just buying it from the builder once it is built?
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Dec 11, 2005
19035 posts
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BornRuff wrote:
Jul 28th, 2009 11:46 pm
I may be way off here, but why would the bank help you pay the cost of breaking the mortgage, and why would they accept a house that doesn't exist as collateral for a loan? What are they going to foreclose on if the h
Usually when building a house you get what is called a builder's mortgage or a "progress draw mortgage", it is a mortgage you get in installments with each installment secured against the previous installment and the in-progress build.

IE, you get a $50K initial installment that is secured against the land. In 2 months you get another 50K installment secured against the land and the build to date. In 2 more months you get the next installment, etc. In this way your mortgage is paying for the build as it progresses and it is always secured against the current value of the build.

Here's more info a quick Google came up with: http://www.hypothequeshlc.ca/builder/ar ... uyers&p=22

Frankly I am not surprised ING turned you down; you can't port a standard mortgage to a builder's mortgage, it is a totally different thing.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
Deal Addict
Oct 30, 2008
2120 posts
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Toronto
+1. Except that his lender doesn't do such a mortgage for residential. They do, I believe, provide it under commercial lending, but that's an entirely different department. Looks like they've made a big exception.
Lior Hershkovitz
Broker at Mortgage Edge, specializes in construction financing and private lending
Construction rates start p+2.5%, 2nd mortgage start 5.99%, private financing start 7% max. 95% LTV

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