A word on the portable loan:

A portable loan is a loan facility that enables the borrower to change an existing security property with a new security property without repaying the loan. With the aid of a portable loan the borrower can sell a house and move to a new one without the need of refinancing. Portable loans are the best cost effective methods of property sale or transfer that saves the application as well as the legal fees. It is like taking the loan individually when selling the property. This means that there is no need of paying any establishment fees and other cost when the new property is bought. Considering the present scenario of high housing prices and rising interest rates, a portable mortgage can help a credit union break down barriers to affordability and position itself as a member's primary financial institution. Since these types of loans allow the borrower to transfer the original loan without any penalty it is equally appealing to both the first time buyers as well as the retirees allowing them to buy more expensive or less expensive in a rising rate environment. It also offers the advantages of the lower loan rate, which is obtained on the previous residence and the buyers successfully avoid the hassle of a new loan shopping when moving. The concept of portable loans are already doing the rounds in the potential home loan markets of Canada, Great Britain and Australia and the trend is slowly catching up in the United States as well.

Disadvantages of portable loans:

However there is lot of terms and conditions that surrounds the portable making them almost as expensive as the cost of refinancing and less convenient than one might think. These typically include the fee for transferring the loan the valuation charges, the legal fees and the mortgage registration fee. More over the loan amount usually remains fixed or unchangeable that arouses the need of refinancing in case if one is buying an expensive property than the existing one. Additionally it is also very hard to avail a portable loan from the mortgage brokers since they will be missing out of the chance of getting a second commission at the time when the borrower refinances or purchasing again.

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