Want a New Home but Don’t Want to Lose Your Low Mortgage Rate? Here’s Everything You Need to Know About “Porting” Your Current Rate
The Lighter Side of Real Estate • August 25, 2023
Want to buy a new home, but don’t want to let go of your super-low mortgage rate? Depending on your loan and situation, there may be something you can do to buy a new property and retain your mortgage rate — a practice known as “porting” a mortgage.
But what, exactly, is a mortgage port, and how do you know if you qualify? A recent article from realtor.com answered frequently asked questions about porting a mortgage, including:
- What is mortgage porting? When you port a mortgage, you transfer your existing mortgage to a new property, which means you get to keep the same interest rate on your loan. However, in order to port a mortgage, you’ll generally need to reapply and get approved for your current loan again.
- What mortgages are eligible for porting? Porting a mortgage can be a great way to buy a new home without sacrificing your competitive interest rate. But, unfortunately, not all mortgages are portable. For example, some lenders allow porting while others don’t. You’re also unable to port a mortgage if you have a variable rate loan, or if you’re buying a home that costs less than the balance of your existing mortgage.
- What homeowners are eligible to port a mortgage? In addition to your mortgage being eligible for porting, as a homeowner, you also need to qualify by meeting your lender’s eligibility criteria, and showing a reliable payment history on your mortgage.
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The House That Started It All Could Kickstart What's Next Remember how exciting it was to buy your first place? It felt like crossing a long-awaited finish line. It gave you a place to build your life. Maybe it’s where you lived when you got married. Or where you welcomed a child or a pet into the family. But that was just the beginning. For most people, your first house was never meant to be your forever home. It’s a stepping stone for what comes next. And if your life looks different today than it did when you got the keys, you’re not stuck. Moving may be more realistic than you think. Starter Home Inventory Is Still Relatively Low If you've been wondering whether now is the right time to move up, here's something worth knowing. Starter homes remain one of the hardest types of homes to find. And that's good news if you're thinking about selling your first place. Historically, we haven’t been building enough homes for first-time buyers. And even though homebuilders have shifted more attention toward smaller, entry-level homes lately, the Census shows there’s a long way to go to re-build supply (see graph below): That means your current house is in demand – and that’s a dream scenario for sellers. But that’s only half the story. You also need somewhere to go. There Are More Move-Up Homes on the Market Here’s where this gets interesting. While the supply of starter homes remains tight (the green line), data from Redfin shows that the number of homes for sale has been climbing overall (the blue line): As Nadia Evangelou, Principal Economist and Director of Real Estate Research at the National Association of Realtors (NAR), explains : “Too much of the inventory available today remains concentrated at higher price points, leaving a shortage of options for entry-level and middle-income buyers.” That means you may have more choices for your move up than you'd expect. Whether you're hoping for another bedroom, a home office, a bigger backyard, or simply more room for this next stage of life, today's market may finally be giving you the chance to find it. At the same time, your current house may be exactly what someone else has been looking for because homes like yours are still in short supply. That's a unique advantage for move-up buyers. And it could help you sell for a stronger price. As Zillow says: "Starter home value appreciation has outpaced other types of homes nationally, mostly because they're so in demand." Your Biggest Advantage May Be Your Equity Here’s the cherry on top. There's one more thing your first home has been doing behind the scenes, and that’s building equity . Every mortgage payment you've made and every year your home's value has grown has quietly increased your ownership stake in your house. According to Cotality , the average homeowner with a mortgage has $295k in equity built up. While your number may be different, once you sell, it could become the down payment on your next home or help reduce the amount you need to borrow at today’s rates. Put it all together and your move up becomes a lot more realistic than you think: The house you're selling is in demand. The house you're buying may be easier to find. And the equity you've built can help bridge the gap between the two. Your first home did exactly what it was supposed to do. It gave you a place to start. Now, it may be the thing that helps you take the next step. Bottom Line Your first home was never meant to be your forever home. It was meant to help you build a life and build the financial foundation for whatever came next. If your current home no longer fits the life you're living today, let’s connect. You may be closer to your next chapter than you realize.
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More Homes, Better Prices: A Buyer’s Summer If you’ve thought about buying a home in the past few years, you may have run into two frustrations: asking prices that kept climbing and too few homes to choose from. In many places, both sticking points are letting up this summer, with lower asking prices and more homes for sale. Let’s look at the trends, and what they mean for your search. Sellers Are Pricing To Attract Buyers According to Realtor.com, the national median asking price was $430,000 in June, nearly $11,000 under what it was the year before (see graph below): That’s the eighth month in a row that the typical asking price has dipped below where they were the previous year, according to the same Realtor.com report. And while falling prices can sound worrying, this isn’t a sign of an impending crash. We’re talking about asking prices, not sold prices. This is a sign that today’s sellers are meeting the market where it is and pricing to draw buyers. And that’s actually something normal we’d expect from the market. As Danielle Hale, Chief Economist at Realtor.com, puts it : “Sellers are reading market conditions and are pricing accordingly from the start rather than listing high and cutting later, and buyers are taking note and making bids. This is a welcome sign that we are in a functioning market. ” Asking prices were never going to climb forever – now they're just settling closer to what buyers can actually pay. That signals a healthier market, and sellers re-adjusting their expectations. More Homes Are Available Now If you’ve spent the past few years watching homes disappear before you could even schedule a tour, this is for you. Supply is starting to catch up. According to Realtor.com, the number of homes listed for sale in June was the highest June number we’ve seen in three years (see graph below): This means more options for you and less competition for each one. Now, supply is not back to normal everywhere. As you can see, we’re still down from where we were back in 2017-2019. But in many places, it’s better than it’s been in a while. Here’s how that helps you. You don’t have to rush an offer just to stay in the running, and you have better odds of finding and landing the right home, not just the one that’s available. Plus, you’ll have more room to negotiate, so you’re searching from a stronger position than buyers had even a year ago. Why This Is Encouraging if You’re Buying Your First Home For first-time buyers looking for lower-priced homes, these trends line up especially well. Mischa Fisher, Chief Economist at Zillow, explains: “The lowest price tiers are exhibiting some softness in terms of price, they also had the most listing-activity growth, the first time since 2022 that’s been the case.” So, if you’re searching for your first place or your next house, there's a little more to choose from and a little more give on price. Bottom Line If a tight budget or a thin selection has kept you from buying a home, now might be the time to restart your search. Ready to see what’s available here? Let’s connect.
