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Let's say I have a mortgage for a house I live in. I find another house and I like it better. Is it possible to take that mortgage I pay and switch the houses? And maybe pay some difference if the other house is more expensive.
Or what are the ways in switching houses similar way? This is in USA.
I've never heard of portable mortgages in the US. If you can't afford two mortgages, you will have to sell the first house to pay off its mortgage before you can buy the 2nd house.
This is done all the time in the US. You can put your current house on the market (advertise it for sale) then arrange for a long closing while you arrange to buy a new house. Also, you can make an offer on a new house and include a contingency clause that you must sell your current house first.
Good escrow companies are very good at managing cascading transactions like this.
You're talking about porting your mortgage, which may be possible if your mortgage was portable to start with, or if your bank subsequently allows it.
Note that although porting a mortgage involves keeping most of the original terms and conditions, the process is still much like applying for a new mortgage, including any lending requirements.
Here's an article on the subject.
EDIT: In response to OP's comment below:
What will happen to the first property if I don't sell it?
Because porting a mortgage is treated as if you were closing one mortgage and opening a new one, this means that you would need to pay off the first mortgage.
Typically this would be done by selling the first property at the same time that you buy the second one. However, if you're not doing this, you'll need to raise funds another way, which could include opening a new mortgage on the first property (of course, if you're doing that, then there would have to be a good reason for porting the original mortgage; otherwise you might as well leave it where it is, and open a new mortgage on the second property instead).
Does the article apply the to USA too?
That article (and indeed this answer) are based on the situation in the UK. However, they appear to exist in the US too, though are rarer than in the UK.
I'm answering your "or what are the ways of switching houses?" question...
The most common way that I've done this for a personal residence is with the following steps:
What I think you may really be asking is, "how do I juggle the fact that I want to move to a new house but I have a current home and mortgage?
Two key pieces of the process are:
Hopefully that helps--plenty of people make their next home purchase contingent on the sale of an existing property.
I would just do a loan for a different number of years on your new mortgage. For example, if you just spent 10 years paying off your first house, then for your second, close the first mortgage upon selling, and then open a 20 or 25 year mortgage and the loan end date as well as the payment should remain similar. This would be more do-able if you paid ahead a little to compensate all the early on interest you have to eat.
So if you want to finish around the same time, you could look into doing that since you'll have more equity to make a stronger down payment.
That is called "substitution of collateral." And yes, it can be done, but only with consent of the lender.
The "best case" for this kind of maneuver is if the second house is larger and more valuable than the first. Another possibility is that you have two mortgages on the first house and none on the second, and you want to move the second mortgage on the first house to the second one, effectively making it a "first" mortgage. In these instances, the lender has a clear incentive to allow a substitution of collateral, because the second one is actually better than the first one.
The potential problem in your case, is if the second house were more expensive than the first house, you could not use the sale proceeds of the first house as to buy the second house without borrowing additional money. In that case, a possible solution would be to go back to the lender on your first house for a larger mortgage, with the proceeds of that mortgage being used to retire the earlier mortgage. Depending on your credit, payment record, etc. they might be willing to do this.
No. You have to reimburse the current mortgage you have and negociate a new one for your new house. A mortgage is a loan from a financial institution that accepts to give you money if you pay it back the total amount adding interests. Interests are the price you pay to the financial institution for it to give you money for a while. In the mortgage you have an legal agreement with the financial institution on how to reimburse the total amount that is given to you for a while. Breaking that agreement is breaking the law. The fact of the matter is that when 30% of your mortgage is reimbursed, the financial institution own your house, legally, for real, at 70%: your live in the house own by the financial institution at 70%. It is the same exact logic for a car loan. The mortgage goes with a specific house at a legal address that you live in as a primary residence.
