Relocation Mortgage Loan
A relocation loan is a short-term, 12-month loan designed to help you buy or build a new home while waiting for your current one to sell.
Pros of Relocation Loans
- Once you find a property, you don’t have to wait to secure a loan. You can buy it immediately.
- You don’t have to rush to sell your current home, allowing you to receive the best possible price.
- You have a twelve-month window to sell your current home. You don’t have to make repayments on your relocation loan during this time, just your existing home mortgage.
- Banks charge the exact fees and interest rates as a standard home loan. If you sell your current home before the twelve-month loan term is reached, you are not charged a discharge fee.
- You don’t have to move twice or pay rent while waiting for your new home.
Cons of Relocation Loans
- Interest on relocation loans is compounded monthly. This means that the more time you need to sell your home and repay the loan, the more interest you are charged.
- The bank will need to perform two property valuations—one on your old home and one on your new home.
- If your old home is not sold or your new home is not built by the end of the 12-month loan term, your lender could start to charge you a higher interest rate. In addition, you may need to make repayments on the relocation loan while still paying your current mortgage.
- If you refinance your loan and switch to a different lender, you may have to pay early termination fees.
If you are in the process of purchasing or building a new home but haven’t been able to sell your old one, the brokers at Mortgage House can help you find the relocation loan that is best for you. Call us today to speak with one of our financial experts.