3 ms·

I feel the same for people with near 0% interest rate mortgages. Like we bought a starter home prior to the pandemic. Buying the same home now would be 3.5x the

by yardie 3y ago

I feel the same for people with near 0% interest rate mortgages. Like we bought a starter home prior to the pandemic. Buying the same home now would be 3.5x the monthly mortgage payment. Buying a slightly nicer, 1 extra bedroom near our neighborhood is completely out of the question. Since no one wants to move because rates are so high it creates a vicious loop of more buyers than inventory on sale.

midasuni 3y ago
Can you not port mortgages in America? I have 4 years left on my mortgage, if I want to move though I can simply sell this place, buy somewhere new, and phone up my mortgage company and take the debt with me - as long as the new place is about the same or more than the current place (so the LTV stays the same or better).
- ghaff 3y ago
  Not typically AFAIK. The mortgage is secured by a specific piece of property which has been inspected, title-searched, etc. It's not a random unsecured loan. It's also the case in the US that you can generally just pay off the loan any time you want.
- warriormonk5 3y ago
  Generically speaking no. There's some exceptions, USDA, VA, and FHA loans. All government programs. But it's tied to the property so only transferable to the purchaser. Very rare here even now with rates changing so much.
- toast0 3y ago
  No, mortgage portability is not a thing in the US, at all. Mortgages are tied to the property and the borrowers. I've never heard of a (US) borrower being able to sell their property and keep the loan. Alternatively, it is sometimes possible for a new borrower to assume the previous mortgage, but it's up to lender discretion, and seems unlikely if a current mortgage would be at a dramatically higher rate. What does seem to happen often is that an owner who wants to move but doesn't want to lose their nice rate will move and then rent our their old place, or at least try to, it can be difficult to qualify for a new mortgage while carrying the old mortgage and not having a history of rent payments.
  - anjel 3y ago
    Assumable mortgages were a (common) thing until the low interest mortgage Era. But they are (again) a thing and in-fact add premium value to the selling price of a home if your mortgage happens to have the feature along with a low interest rate. VA mortgages are the convenient example for this but there are other types of assumable residential notes as well. https://therealdeal.com/national/2023/06/12/assumable-mortgages-shine-bright-in-residential-market/ https://therealdeal.com/national/2023/06/12/assumable-mortga...
- yardie 3y ago
  For a conventional fixed rate mortgage it's highly unlikely. ARM, 5/1 may be assumable depending on terms.
- woobar 3y ago
  Is your mortgage rate fixed rate or the rate is updated often?
  - midasuni 3y ago
    Normally in the U.K. they are fixed for a period of time - 5 years is quite common, but you can get 10 and even full term ones. You can also get ones which track the base rate. Typically people refix after the term. My 5 year recently ended and my monthly cost increased as I’m now fixed at a higher rate for another 5 years - at 4.5%, although it’s still less %age of my wage than it was 5 years ago. During the fixed term you can’t repay it without a penalty, but if you move house you can port the mortgage so it’s secured against the new house instead.
- orangecat 3y ago
  Matt Levine wrote about this recently. In theory there's a win-win trade where you should be able to buy out your 3% mortgage at a discount (or equivalently, pay it off and get a mortgage on a new place at a slightly higher rate). In practice, banks won't do this because they figure you're bluffing and will eventually move anyway.
salamandersss 3y ago
Yep. It's using the fed to reallocate money from the inflated cash based poor to the credit rich home owner. Home owners are basically using government induced negative real interest rates to regressively tax non-homeowners. We got blown away by the pandemic that locked up the housing stock. So I cheated and built my own house for like 1/4 the cost it is on the market as it's almost all markup from the opportunity cost of losing the 0% loan. For those that have lost hope seriously consider a prefab for like 60k dropped on some vacant land. Where I live you don't even need inspections or license to do it yourself. But you need to develop the land yourself, and not hire out a GC, because developers will always be chasing high margin luxury builds rather than the low margin methods I've discovered for economical housing.
- tiahura 3y ago
  Are you actually trying to make the case that high interest rates are good for poor folks?
  - salamandersss 3y ago
    I was not intending to make that case. Negative real interest in our real life reality where the better off have better access to credit nearly certainly hurts cash based poor by making homes etc cost less in real terms to the rich at the expense of inflating the poor. Basically the poor have worse access to credit than other groups so when interest goes negative in real terms the poor pay for it.
  - idontpost 3y ago
    [dead]
geraldwhen 3y ago
Higher rates mean more stable or possibly even lower house prices. This is good for cash buyers, at least. For those of us here, that’s probably well within reason in most of the country where you can buy a house for <$600k
- grecy 3y ago
  > Higher rates mean more stable or possibly even lower house prices Sure the price of the houses has gone down, but higher interest rates mean my monthlies are higher than they were, which means I can't afford a house!

by yardie 3y ago

midasuni 3y ago

Can you not port mortgages in America? I have 4 years left on my mortgage, if I want to move though I can simply sell this place, buy somewhere new, and phone up my mortgage company and take the debt with me - as long as the new place is about the same or more than the current place (so the LTV stays the same or better).

ghaff 3y ago
Not typically AFAIK. The mortgage is secured by a specific piece of property which has been inspected, title-searched, etc. It's not a random unsecured loan. It's also the case in the US that you can generally just pay off the loan any time you want.
warriormonk5 3y ago
Generically speaking no. There's some exceptions, USDA, VA, and FHA loans. All government programs. But it's tied to the property so only transferable to the purchaser. Very rare here even now with rates changing so much.
toast0 3y ago
No, mortgage portability is not a thing in the US, at all. Mortgages are tied to the property and the borrowers. I've never heard of a (US) borrower being able to sell their property and keep the loan. Alternatively, it is sometimes possible for a new borrower to assume the previous mortgage, but it's up to lender discretion, and seems unlikely if a current mortgage would be at a dramatically higher rate. What does seem to happen often is that an owner who wants to move but doesn't want to lose their nice rate will move and then rent our their old place, or at least try to, it can be difficult to qualify for a new mortgage while carrying the old mortgage and not having a history of rent payments.
- anjel 3y ago
  Assumable mortgages were a (common) thing until the low interest mortgage Era. But they are (again) a thing and in-fact add premium value to the selling price of a home if your mortgage happens to have the feature along with a low interest rate. VA mortgages are the convenient example for this but there are other types of assumable residential notes as well. https://therealdeal.com/national/2023/06/12/assumable-mortgages-shine-bright-in-residential-market/ https://therealdeal.com/national/2023/06/12/assumable-mortga...
yardie 3y ago
For a conventional fixed rate mortgage it's highly unlikely. ARM, 5/1 may be assumable depending on terms.
woobar 3y ago
Is your mortgage rate fixed rate or the rate is updated often?
- midasuni 3y ago
  Normally in the U.K. they are fixed for a period of time - 5 years is quite common, but you can get 10 and even full term ones. You can also get ones which track the base rate. Typically people refix after the term. My 5 year recently ended and my monthly cost increased as I’m now fixed at a higher rate for another 5 years - at 4.5%, although it’s still less %age of my wage than it was 5 years ago. During the fixed term you can’t repay it without a penalty, but if you move house you can port the mortgage so it’s secured against the new house instead.
orangecat 3y ago
Matt Levine wrote about this recently. In theory there's a win-win trade where you should be able to buy out your 3% mortgage at a discount (or equivalently, pay it off and get a mortgage on a new place at a slightly higher rate). In practice, banks won't do this because they figure you're bluffing and will eventually move anyway.

salamandersss 3y ago

Yep. It's using the fed to reallocate money from the inflated cash based poor to the credit rich home owner. Home owners are basically using government induced negative real interest rates to regressively tax non-homeowners. We got blown away by the pandemic that locked up the housing stock. So I cheated and built my own house for like 1/4 the cost it is on the market as it's almost all markup from the opportunity cost of losing the 0% loan. For those that have lost hope seriously consider a prefab for like 60k dropped on some vacant land. Where I live you don't even need inspections or license to do it yourself. But you need to develop the land yourself, and not hire out a GC, because developers will always be chasing high margin luxury builds rather than the low margin methods I've discovered for economical housing.

tiahura 3y ago
Are you actually trying to make the case that high interest rates are good for poor folks?
- salamandersss 3y ago
  I was not intending to make that case. Negative real interest in our real life reality where the better off have better access to credit nearly certainly hurts cash based poor by making homes etc cost less in real terms to the rich at the expense of inflating the poor. Basically the poor have worse access to credit than other groups so when interest goes negative in real terms the poor pay for it.
- idontpost 3y ago
  [dead]

geraldwhen 3y ago

Higher rates mean more stable or possibly even lower house prices. This is good for cash buyers, at least. For those of us here, that’s probably well within reason in most of the country where you can buy a house for <$600k

grecy 3y ago
> Higher rates mean more stable or possibly even lower house prices Sure the price of the houses has gone down, but higher interest rates mean my monthlies are higher than they were, which means I can't afford a house!