Many homeowners would like to buy now but sell their home in the future. This strategy can be accomplished by utilizing a low-down payment mortgage on your new purchase while waiting to sell your departing residence.
Benefits of Buying Now and Selling Later
There are several benefits to buying now and selling later.
These include:
Time to prepare your current home for sale. You can take the time to make any necessary repairs or renovations to your current home before putting it on the market. This can help you get a higher price for your home.
Avoid the hassle of moving twice. By buying your new home before selling your current home, you can avoid the hassle and expense of moving twice.
Take advantage of favorable market conditions. If you're in a buyer's market, you may be able to get a great deal on a new home. By buying now and selling later, you can lock in that low price before the market changes.
Considerations When Buying Now and Selling Later
There are also a few things to consider when buying now and selling later.
These include:
Qualifying for two mortgages. You will need to be able to qualify for two mortgages at the same time. This means that you will need to have good credit and a low debt-to-income ratio.
Managing two households. You will need to be able to manage the costs of two households. This includes things like mortgage payments, property taxes, and utilities.
The potential for carrying costs. If your current home doesn't sell quickly, you may be responsible for carrying costs for both homes. This can include mortgage payments, property taxes, and homeowners’ insurance.
Example of Buying Now and Selling Later
One of our recent clients desired to purchase a new home but wanted to remodel it before moving in. The clients put 5% down on the new house, completed the remodel, and then moved in. Once settled into the new home, they sold their departing residence and paid down the “new” loan to an 80% loan to value.
Tips for Buying Now and Selling Later
If you are considering buying now and selling later, here are a few tips:
Talk to a mortgage lender. A mortgage lender can help you determine if you qualify for two mortgages and can help you understand the carrying costs involved.
Make a plan for selling your current home. This includes pricing your home competitively, making necessary repairs or renovations, and working with a real estate agent.
Be prepared to be patient. It may take some time to sell your current home. Be prepared to carry the costs of two households for a few months. Buying now and selling later can be a great way to get into your dream home without having to sell your current home first. Just be sure to carefully consider the pros and cons and make a plan before you start the process.
I hope this blog post is helpful.
Please let me know if you have any other questions.
Comments