“The best time to buy a home is always five years ago”
Ray Brown, Jazz Musician
Are you at that point in life where the idea of downsizing your living quarters is becoming more attractive? For many of you who are now empty nesters, a large home has become more of a burden than a blessing. Maintenance is a chore that just seems to steal your weekends. Utility and tax increases leap right out of your budget.
There is just one thing holding you back, your mortgage. Have you purchased or refinanced within the past few years? Your interest rate could easily be half of what a new mortgage would cost. It’s possible you could even be below 3%! With today’s interest rates approaching 8%, a new mortgage, even in a smaller home, might wind up costing you more than your current payment.
However, you may have an alternative.
If you think about it, a mortgage is simply a personal loan secured by property, typically the home you occupy. What if you could keep your current mortgage but just have it secured by a different house?
There is a process that can accomplish this. It’s called “Porting” your mortgage. Porting a mortgage allows you to take your remaining existing mortgage at its current rate and transfer it from your present home to your new home. Whether you can do this depends. Some mortgage companies offer this, many don’t. It may also depend on the wording in your mortgage documents.
Contact your mortgage company to see if this may be an option for you. Lenders who may allow mortgage porting include Bank of America, Wells Fargo, Chase, and Quicken Loans, among others.
Keep in mind you may need to climb the ladder of corporate managers to find one that can give you an answer. These days, mortgage companies will most likely be reluctant to keep a low interest rate loan, when they could replace it with one generating perhaps double the income to them.
There are also other requirements you must fulfill. These would include applying and qualifying for your mortgage all over again, and an appraisal on the home you would be purchasing.
It can be a complicated process, but one that could allow you to ease into a new lifestyle and reduce your monthly expenses. It’s a prime time possibility worth checking into.