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  1. #1
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    Question buying and selling property - a home loan question

    I figure this is as good a place as any to ask this question. Hopefully someone has the answer!

    DH and I are selling our current property and planning to buy a new one. Doing this will reduce our home loan (ie: we are selling for more than we are buying) and we are wondering if we will need to go through the whole home loan application process again or whether it's just a case of the bank agreeing to a change of security?

    Does anyone know what paperwork is involved? We want to stay with our current bank and home loan set up. I've been trying to get a time to meet with them but they are taking their time returning my calls and we want to know the details before we put an offer on a place (and time is running out!).

  2. #2
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    Yes you will have to go through the whole thing again! Mainly as you are paying out your old load you are technically starting again so they have to process you again on your current income etc ( plus I'm sure they get to charge more !)
    You will need your tax returns/pay slips/credit card debts etc , same as when you first would have applied

  3. #3
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    An make sure you research your
    Mortgage insurance and see if you can get a rebate on unused amount of transferred

  4. #4
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    I think the bank can do a substitution without going through the whole process again, but they would have to look at the new security and value it, and redocument.

    But I don't know if they would have to assess your income again.

    I think I did a conveyance settlement for a substitution years ago, and the settlements for the sale and purchase had to be simultaneous.

  5. #5
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    We did just as you are wanting to do late last year and we did have to go through the whole process again it was a pain in the a.... To be honest we hadn't given it a lot of thought before just figured we were going to be reducing our loan significantly so why would it be difficult but it all turned out in the end just wish we'd been better prepared

  6. #6
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    When I asked my bank about this they said they could do a substitution of security if settlement for both properties was on same day. But I think mortgage insurance was lost on the first property and would have to be paid again on the second - which would only apply if you need mortgage insurance.


 

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