Trump Administration Considers Allowing Mortgages to move With Homeowners
WASHINGTON – The Trump administration is exploring the feasibility of “portable” mortgages, a potential shift that would allow homeowners to transfer their existing mortgage terms – including interest rates – to a new property. The idea, still in early evaluation, aims to address affordability concerns and unlock home equity for those considering a move, but faces notable logistical and legal hurdles.
Currently, mortgages are tied to a specific property, functioning as a contract secured by the home’s address. Transferring a mortgage would essentially require rewriting the agreement, a complex undertaking.”It’s too early to tell what’s going to happen, but it’s going to be a logistical nightmare,” said Justin Demola, president of Lenders One, a national alliance of mortgage bankers. “All mortgages have a property address, a legal description. How do you get around that as you’re taking the mortgage to the next property?”
the concept of portable mortgages is being considered alongside other housing proposals,including a potential 50-year mortgage. However, the 50-year mortgage has already drawn criticism from housing experts who argue the long-term interest costs would outweigh any minimal monthly savings compared to a standard 30-year fixed mortgage.
The administration is also examining the expansion of assumable loans,which already exist for many government-backed mortgages like those from the Federal Housing Administration.Assumable loans allow buyers to take over a seller’s existing mortgage and rate. While companies already assist buyers in finding homes with assumable mortgages, Demola believes widespread adoption is unlikely. He notes that assuming a mortgage typically requires a substantial cash payment or a second mortgage to cover the existing loan balance.
“Loans have been assumable forever. You don’t realy see many being assumed right now,” Demola said. The viability of portable mortgages remains uncertain as the administration weighs the challenges of implementation against the potential benefits for homeowners.
