The Move Act

For homeowners with mortgage rates around 2.75%, selling a home can be a difficult decision. Moving typically means giving up that low rate and taking on a much higher mortgage rate.

 

That’s the problem behind the current "mortgage lock-in effect". Many homeowners feel "locked in" to their current mortgage and are unable to sell their home and buy a new one because of the current high interest rate.

 

A newly introduced bill, the MOVE Act, would direct Fannie Mae and Freddie Mac to purchase portable mortgages. If implemented, homeowners could potentially move their existing mortgage to a new property while keeping:

 

· Their current interest rate

· Their remaining loan balance

· The remaining term of the loan

 

There are important limitations...

 

Portability would apply to the existing mortgage balance, not the full price of the new home.

 

For example, if you owe $500,000 on your current mortgage and purchase a $900,000 home, you would still need to cover the additional $400,000 through cash, sale proceeds, or other financing (aka a second loan at today's rates).

 

There’s no guarantee the Move Act will become law. It has only recently been introduced and is still at the committee stage, where many bills ultimately do not advance.

 

However, the proposal highlights how seriously policymakers are looking at the mortgage lock-in effect and its impact on housing inventory.

 

Would the ability to take your current mortgage rate with you make you more likely to sell?

 

As Always...