Real Estate

Mortgage switch - exact steps and process

  • Last Updated:
  • Sep 7th, 2020 3:22 am
[OP]
Newbie
Mar 22, 2009
41 posts
5 upvotes

Mortgage switch - exact steps and process

Hi there,

I am looking for guidance regarding switching lenders - before my current term is up. My plan is to also request this from my broker and research online / learn from fellow RFDers.

1. There's a specific date when the switch happens. How do I determine the precise outstanding principal on that date? I believe asking the current lender is the best option? Should that amount be the requested amount with the new lender?
2. For my situation, its a early termination and so there's a penalty involved. I have been told that this can be added to the new mortgage amount or can be paid directly to the current lender. Is that correct?
3. It's a switch and not a refinance. Do I need to have a lawyer or notary involved? Neither mortgages are collateral charges if that matters
4. Should I be requesting a mortgage payout statement from the current lender? Looks like that may be required based on my Google searches so far
5. I am in BC if there are any province specific rules

Is there anything else to watch out for?
Thank you
2 replies
Deal Fanatic
Nov 22, 2015
5685 posts
5087 upvotes
As far as I know, you go to a broker or any bank and start a mortgage application... They will let you know what documents they need and take care of the rest.

Pretty sure the lender can request the payout from their end. Nothing really for you to do
Newbie
User avatar
Apr 5, 2017
97 posts
104 upvotes
1. There's a specific date when the switch happens. How do I determine the precise outstanding principal on that date? I believe asking the current lender is the best option? Should that amount be the requested amount with the new lender?
Your lawyer would request a payout statement as of the date of closing, it will include all your outstanding funds plus penalties, discharge fees etc

2. For my situation, its a early termination and so there's a penalty involved. I have been told that this can be added to the new mortgage amount or can be paid directly to the current lender. Is that correct?
Varies from lender to lender. If there is equity in the home the refinance amount may be higher than the current mortgage/penalty payout amount.

3. It's a switch and not a refinance. Do I need to have a lawyer or notary involved? Neither mortgages are collateral charges if that matters
If you are going to a new lender it is a refinance, you'll need a lawyer. You are essentially registering a new mortgage and discharging the previous one.

4. Should I be requesting a mortgage payout statement from the current lender? Looks like that may be required based on my Google searches so far
The lawyer requests the payout/discharge statement. Your broker may ask for your current statement or the annual statement you received in January.

Top