Whether you are the listing Realtor, the selling Realtor, or a mortgage broker, mortgage payout penalties can be a huge issue. If your client has a mortgage payout to factor into their decision-making, get that official mortgage payout statement!
This week, my seller client had to sell with four years left on their five year mortgage. He thought his payout penalty was going to be three months interest, which was about $1,800.
Wrong!
His mortgage had the pretty standard provision that said the penalty would be three months interest or the interest rate differential, whichever was larger.
You guessed it. The interest rate differential calculation was $11,400, not the $1,800 my client expected.
Always get an official payout statement.
Cheers,
Barry
