Unlocking Lower Mortgage Rates: Explore Mortgage Porting and Other Smart Strategies

Mortgage Porting: A Little-Known Option for Homebuyers Buying a new home can be stressful, especially when dealing with mortgage rates. Many homebuyers are unaware of a financial tool that can help them keep their current low mortgage rate when they move: mortgage porting. While not common in the US, mortgage porting is a process where the existing mortgage is transferred to a new property. This allows buyers to avoid the higher interest rates associated with a new mortgage. "In the United States, mortgage porting is not very common," explains Steve Saxton, a financial advisor and the creator of the video. "It's more common in places like the UK and Canada." However, Saxton emphasizes that there are alternatives for US homebuyers looking to secure a favorable interest rate. These include assuming the seller's mortgage, particularly if it's a VA or FHA loan, or opting for an adjustable-rate mortgage for a shorter term. Another strategy, becoming increasingly popular, involves seller-paid concessions. Sellers are often willing to help lower the buyer's interest rate to facilitate a sale. This can be done through a 2-1 buy down, a 1-1 buy down, or even a permanent interest rate buy down. Saxton advises homebuyers to explore these options to avoid being locked into current, potentially higher, rates. "Because they want to get the home sold, they're offering to buy that rate down," says Saxton, highlighting the benefit for both buyers and sellers. By understanding these options, homebuyers can navigate the complexities of the mortgage market more effectively and potentially secure a more favorable financial outcome.