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Is my loan portable if I purchase another property?

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A lot of lenders actually allow this to happen and it is called portability. You will need to check that your loan has a feature that will allow portability, if it does then I will explain how this works. Basically portability allows you to swap one property with another as security for the loan. This only works if you do not need to borrow any further money to fund the transaction. As an example if the property you sold was for $410K and purchased one for $350K and had a $200K loan then the additional $60K could be used towards the stamp duty and real estate agents commissions on the sale of your property and theoretically the loan amount would not need to change so the lender could just switch the properties being held as security. If the figures are in the reverse and you sold for $350K and purchased for $410K then a new loan will need to be established as you require more funds to complete the transaction and the loan amount will need to increase and portability cannot be used. The upside of portability is that it is generally cheaper than applying for a new loan and you do not need to provide a whole lot of documentation to verify your income nor apply for a new loan and your existing arrangements can stay in place.

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