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This can be done, but it will possibly mean amending your mortgage offer. The bank or lender you use will organise for another valuation to take place on the new property. If the new property is cheaper than the first one, some lenders may only let you move your mortgage if you keep the same loan-to-value (LTV) ratio.
If your lender informs you that its mortgage offer is being withdrawn and will be replaced with another offer with a higher interest rate, get advice from your mortgage broker. It may be able to advise you on what your options are and the next best deal.
In most cases once you secure a rate you can cancel it without charge, however some lenders won't allow you to cancel the rate you have secured once you have accepted it. This means that if a better rate becomes available, you won't be able to cancel the product switch.
Any contract in Canada is subject to the approval of both parties, and a real estate transaction is no different. Therefore, there are typically significant financial or legal consequences if the buyer or seller simply changes their mind and backs out of an offer after it has been accepted.
If you need to terminate a mortgage agreement and state laws allow for you do so, you should follow these steps: Review the agreement. ... Contact the lender. ... Negotiate with the lender. ... Pay any applicable fees. ... Obtain a release.