Discharging Your Existing Mortgage

It’s common for many people when selling their home to use the proceeds from the sale to discharge or pay off their mortgage loan. If you have a fully open mortgage you can discharge it at any time without penalty. However, if it’s a fully closed mortgage then discharging it may require you to pay substantial penalties. This is often in an amount that is equal to several months interest payments.

There are ways to avoid these penalties such as taking a portable mortgage with you when you sell your present home and applying it to the home you buy. Depending on your specific sales objectives you may be able to time the sales completion to coincide with the end of the mortgage term.

Mortgage "Portability"

The portable mortgage allows you to take your mortgage with you (without penalty) if you sell your present home and buy another one. This can be very beneficial particularly if the interest rate on your mortgage is lower than the market rates at the time of your move.

If your new home requires a larger mortgage amount the additional funds required can usually be furrowed at the current market rate. Portability can also enable you to avoid substantial penalties in discharging a closed mortgage when you sell your home.





Bridge Financing

If you are planning to buy your next home before the sale of your current home is complete, you may want to consider bridge financing. Bridge financing enables you to borrow an amount equal to, or less than, the net proceeds you are expecting to realize on your sale. The to use these borrowed funds to purchase your next home. When the sale on your current home closes you can use the proceeds to pay off the short-term bridge loan plus interest.

Tax Implications of Selling Your Home

Under most circumstances, you will not have to pay tax on any capital gain (the increase of your home's value) when you sell your primary residence.

Estimating the Proceeds from the Sale of your Home

Use this handy worksheet to help you estimate the proceeds that you will have remaining after the sale of your home.

Income
Sale Price $ __________________
Refund of pre-paid costs:
  Utilities $ __________________    
  Heating oil/propane $ __________________  
  Homeowner's insurance $ __________________  
  Real estate taxes $ __________________  
  Condominium maintenance fees $ __________________  
  Municipal assessments $ __________________  
Other Income $ __________________  
 
Total Income $ __________________ A
 
Payments
Balance of mortgage loan $ __________________  
Interest on mortgage since last payment $ __________________  
Mortgage prepayment penalty $ __________________  
Other lender fees $ __________________  
Real estate tax pro-ration $ __________________  
Real estate commission $ __________________  
Legal fees $ __________________  
GST on professional fees $ __________________  
Other payments $ __________________  
 
Total Payments $ __________________ B
 
Net Proceeds from Sale $ __________________ A-B


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Erin O'Leary
  April 07, 2024

Lori and her team are excellent! We worked directly with Morgan and it was a great experience! Morgan was dedicated to finding us the right home. She really listened to our wants/needs and was sure to help us stick to what we were looking for. Morgan is very professional and made us feel comfortable throughout the process. We are very excited about our new home and would highly recommend this team! Thank you Morgan & Lori!

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Lisa Potts
  April 04, 2024

Lori and her team are dedicated, supportive, available and personalize the entire home selling process. They work hard and get the best results. We are so pleased to have had the opportunity to work with such a great team and appreciate all they have done!!! Great work!

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Sharon Dawson
  March 28, 2024

Our first time selling a home, Lori and her team made the whole process, every step of the way, incredibly easy! Under her leadership and recommendations with amazing contacts, we got the house up and ready to sell quickly. We sold within in two days!! In a somewhat daunting process, Lori and her team communicated with us, with updates and response times were immediate! We are eternally grateful Lori, we couldn’t have done this without you! We would definitely recommend Lori VanDinther and her incredible team!!!! Special thanks to Morgan for all her help too!!

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F C
  February 20, 2024

Thank you Lori VanDinther - Burlington Realtor for leading us to an amazing outcome! Our first meeting you asked us what we needed and we said “a leader and strong communicator who is proactive on their approached”. You delivered 100%! We couldn’t be happier with this outcome and look forward to the next step - buying! One million thank yous to you and your team.

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