So there is a change in your life. A new job, addition of a family member, or marriage. Any number of life changes sometimes will give you the feeling that your current home no longer lives up to your lifestyle. With your new needs can you really get a new home to match?
Yes! If you have lived in your home for a few years (typically more than 5) you now have equity. The money you have been paying every month has slowly but surely been adding up and now you may have thousands of dollars paid off from your current home that you can use to buy your upgrade! This isn’t even counting the raised market value of your current home from the time you purchased. What some people elect to do is to sell their current home, take the leftover money from the sale and use it for the new home down payment. A second option would be to rent out their current home to get passive income and purchase a new home if you have money saved for a down payment. If you are interested in changing your surroundings here are 5 steps to take to make sure you go in with a plan!
Step 1: Out with the old
After a number of years living in any home you can often find the little imperfections that you become accustomed to. If you now find yourself wanting a pool, a single story home to avoid the steps every day, a bigger kitchen, or an additional room. Having an idea of the things you’d really like to change will help you to narrow down what you would love and the things you already enjoy about your current dwelling. Some things can just be added to your current home with a remodel but if it seems like too much work hiring contractors or researching companies to go with who are reputable, the next step may help you decide what route to take.
Step 2: Plan your finances for your future self
One thing people automatically think about when considering another big purchase in life is how your bank account will be affected. With the current equity in your home a personalized home valuation can give you insight if it is feasible to change your surroundings now, or when it would be a good time to make the change. A good real estate agent can help compare homes around you and your tax records to give you a nice recommendation on what they would recommend to list your home for. Taking any excess money, you can then apply it to the purchase of a home and your mortgage payment may not change very much! With a professionals help it would be easy to calculate these figures to see what kind of financial future awaits.
Step 3: Preparing for a new lifestyle
If you are thinking about selling your home you should first think about fixing all of the major things you may have neglected. As you may have found out when you purchased, the inspection period is a deal breaker and curb appeal makes the offers fly in. The best way to simplify it would be to think if you were someone interested in buying your home. What kind of things would make you skip to the house down the street, or what really draws you into your current house? Focusing on what makes your current home really shine will help potential buyers to fall in love and the offers will fall into your lap if your property is appealing enough. As the old quote goes “it takes money to make money” so you may think about painting your home or doing a few nice touches here or there. Doing small things can make a huge impact on how long it takes to sell. Don’t worry though, if you have received a home valuation you will be aware of how much money you are willing to invest in order to get the home you will love.
Step 4: So you sold, now what?
There are a few ways of going about your new home venture. You can list your current home and search for a new home at the same time, or you can look for a new home after the sale of your current home. If you elect to look for a new home while selling your current home be sure that you reach out to a mortgage broker that you trust in order to make sure you get a good rate and good information before starting the home buying process again. They will be able to give you an idea of what you can afford while your equity is still tied up in your current household. In the scenario that you find a new home before you sell your current one, you can always rent it out briefly to cover the monthly costs with a property managers help or you can leave it vacant for potential buyers to use their imaginations when they tour. Looking at a vacant home is a really good way to picture yourself there. It is easier to imagine your dining room table in a room without furniture. If you elect to sell first and buy later it is actually quite easy. For the time in between homes you can even hold some of your furniture in storage pods that will deliver as soon as you close on your future home. As far as living space, you can choose to stay with friends or family for a few weeks while the search of your home takes off.
Step 5: Choosing the right professional to help in your new journey
There are three people that I would recommend you find in order to make your transition as smooth as possible. First would be a real estate agent you trust to help you with the home valuation and advice when you have the inevitable questions during the process. Real estate transactions are some of the biggest decisions you can make so it really helps to have a knowledgeable person right behind you to help you with anything you need. The second person would be a mortgage broker. If you have a good mortgage broker you can not only get amazing rates but peace of mind knowing that they are going through every line of the process and matching up all of the numbers and figures needed to make your dreams happen. The good ones often eat, sleep, and breathe finances so having a trustworthy one on your team is important. The third person you would need would be a licensed professional to perform your current homes repairs. There is nothing worse than trying to put your home up for sale only to cut corners and have your new upgrades look like you tried to save money any way possible. If you know the right people you can get great deals on home repairs and remodels. If for whatever reason you don’t have people in mind, a real estate agent or a mortgage broker often run into many people throughout their time doing business so they usually know people they personally trust to help their clients get the most of their money and to do a good solid job.
If you decide to take the next steps into looking for your upgraded home feel free to reach out with any questions you might have in mind. I would be glad to help you through the process or clarify any information you need. Congratulations on taking your first steps to a new lifestyle!