5 ms·

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 u

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.

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.