We’re In Trouble ...

Barefoot,

We’re in trouble! We are currently trying to sell our house for $455k. We have a mortgage of $350k and car debts of $40k. We are on a single income of $80k (which is why we are selling the house). We then plan to pay off the two cars and the mortgage, and get a new house for around $250k (we are in a regional area). We are currently locked into our current mortgage rate, which is about 5 per cent. Should we pay the mandatory $10k to get out of the mortgage, or do what our bank advises and do a same-day settlement?

Tammy

Hi Tammy,

This is why I don’t like fixed rates. I don’t see how you can avoid paying the break fee, same-day settlement or not. But there is something you can do: negotiate with your bank -- tell them that if they want to pick up your new loan, they have to do you a deal on the break fee. It sounds like you’re making good long-term decisions that will take stress off your family, so either way I wouldn’t let this little matter put you off your path.

Scott