Buying a home the second time around should be a breeze, right? You may think so but often, believe it or not, buying your second home can be even more challenging than your first. Second time buyers often face different struggles than first time buyers such as taking on a duel mortgage if their first home doesn’t sell in time or having to save yet again for a hefty down payment meanwhile trying to save for a child’s college fund.
Whatever your reason may be to purchase a new home whether that be downsizing, upgrading to a larger home for your growing family, or relocating, here are some tips to help you through the process.
Consider your options
If at all possible, try to sell your current home first to avoid paying two mortgages at once. If you are struggling to do so, you may want to consider renting your home out until the market is right. If you are looking to sell now, calculate the estimated overall cost including repairs needed, cosmetic improvements, real estate commission, etc. Assess your home’s value as well and your current debts and finances to see how much equity you have built from your first home that you can put into your second.
Don’t forget the most important step in the home-buying process, getting pre-approved for your new mortgage! Contact your mortgage professional to discuss the life of your current mortgage loan, your current credit score, and current mortgage rates and loan programs available to you. Once your finances are evaluated and you are pre-approved for your next home, you can begin the search with peace of mind.
Hire an agent
Just because you’ve already been through the process once doesn’t mean you can go it alone this time around. Hiring a real estate professional can help save you major headaches and aid you in both the selling process and the buying process as well. Your agent can also help you with pricing, negotiating and clue you in on current market trends and buyer perception.
You may have more income now than you did as a young, inexperienced, first time buyer, however, it is important to remember the golden rule of not borrowing too much when buying another home. Maxing out on a loan can cause financial issues down the road as interest rates rise, salaries/job security can change, and unforeseeable emergencies come up. It is also important to remember that like the first time, you still need a sizeable down payment for your next home. This will likely come from the sale of your first home; however, it is wise to save extra in the event that your timeline does not go as planned.
If you are interested in selling and purchasing a new home, now is a great time to do so! Contact me with any questions or concerns you may have, I’d love to be of assistance.