Current Homeowners: How to Move Despite High Mortgage Rates

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Are you a homeowner ready to move but feeling stuck because of high mortgage rates? In this video, I’ll address the common dilemma many homeowners face today and share strategies to help you move into a new home without breaking the bank. I’ll dive into my personal situation and offer creative solutions that could work for you too.
The Problem:
As a homeowner with a $500,000 mortgage balance, I refinanced during the pandemic and secured an incredible 2.25% interest rate on a 30-year fixed mortgage. My current monthly payment is $2,150. However, if I were to buy a new house with the same loan amount at today’s higher interest rates, my monthly payment would jump to $3,500-a 63% increase. This would result in an additional $550,000 in interest over the loan's life. This scenario is preventing many homeowners from moving, contributing to the low inventory of homes for sale. But don’t worry, I have several potential solutions to help you move despite high mortgage rates.
Solutions:
Check for a Portable Mortgage:
Ask your lender if your mortgage is portable. While most aren’t, a portable mortgage allows you to transfer your existing mortgage, including its low interest rate and terms, to a new property.
Downsize:
Consider moving to a smaller house if you don’t need all the space you currently have. Downsizing typically means a lower price and a more affordable new home.
Move to a Lower-Cost Area:
Relocating to a cheaper area can make homeownership more affordable, though there may be trade-offs such as longer commutes or different school districts.
Rent Instead of Buy:
In many areas, renting can be significantly cheaper than owning. You can invest the money saved by renting into higher-return investments, like index funds.
Renovate Your Existing Home:
If you love your location but need more space or a different layout, consider renovating. Remodeling can be more cost-effective than moving due to the high transaction costs of selling a home. Check out Realm, a service that simplifies the renovation process and saves you money. Use my affiliate link to get $200 off your deposit when starting a project with Realm .
Buy a House with an Assumable Mortgage:
An assumable mortgage allows you to take over the seller’s loan terms and interest rate. While not all mortgages are assumable, this option can make moving more affordable.
Increase Income and Lower Monthly Debts:
Improving your debt-to-income ratio by finding a higher-paying job or paying off debts can increase the mortgage amount you can afford.
Wait:
Sometimes, the best option is to wait until you have more savings or until market conditions improve.
Disclaimer: The information provided on this KZbin channel is for educational and entertainment purposes only and should not be construed as financial or investment advice. The content on this channel is not intended to be a substitute for professional financial or investment advice, and you should always do your own research and consult with a licensed financial advisor before making any investment decisions. The views and opinions expressed on this channel are solely those of the author and do not necessarily reflect the views of any organization with which the author may be affiliated. Investing involves risk, and past performance is no guarantee of future results. By accessing this channel, you acknowledge that you have read and understood this disclaimer.