Moving Your Mortgage

Here’s a challenge for the lenders out there: how about some legislation that would allow a current homeowner to move their mortgage to a new property? This would eliminate the problem that many homeowners have right now.

The Current Problem: “I Love My Mortgage”

Many homeowners have fallen more in love with their current interest rate than they have with the idea of moving up and it’s keeping them put.

A Possible Solution

Someone could take their current mortgage amount and interest rate and move it to a new property, or even better increase the amount of the mortgage to a move-up property if they’re moving up too a more expensive property. The current loan could become the first trustee and the same lender could do the second trust deed at current interest rates, thereby earning new business and not losing an existing loan.

This would be an incentive for current homeowners to move and free up inventory.

This Favors Current Homeowners

Of course, this favors someone who already owns a home and is moving up, but doesn’t do anything for the first-time buyer coming into the market. But once again it’s a way of getting more homes out there on the market.

The other thing that can be discussed is adjustable rate. Mortgages can be a very good option in markets like this with rates just rising significantly.

Past Interest Rates

There was a time in my career when interest rates were almost 20% and the market was full of adjustable-rate, mortgage options, and the majority of home buyers myself included got into the housing market with these products.

These can be viable and affordable options.

An Alternate Option

A second option would be to make current non-government loans assumable by new buyers.

Currently, only VA and FHA loans are assumable, which account for a very small percentage of loans in America.

Conclusion

It’s time for some creativity in the lending arena. We must keep the American Dream of homeownership from withering away!

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