Homeowners with historically low mortgage rates may have an option to move without losing their favorable terms, according to consumer advisor Clark Howard.
Many people who secured mortgages with interest rates as low as one to three percent are now hesitant to move due to the potential loss of these advantageous rates. However, Howard suggests that renting out the current home could allow homeowners to maintain their low mortgage payments while relocating to a new residence.
“There are a lot of people who’ve got a really good problem,” said Clark Howard, a consumer advisor. “They took out a mortgage when interest rates were one, two, or three percent. And now they’d really like to move on.”
Howard explains that by renting out their current home, homeowners can continue to benefit from their low mortgage rates. “You maintain a big benefit from the very low mortgage rate and you’re going to make more money because you’re able to rent out with that very low monthly payment you have right now,” he said.
This strategy allows homeowners to live where they want, potentially as renters themselves, without being tied to their current location due to their mortgage.
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