Look at the sale of your current home and
the purchase of your new home as one strategy and you can really come out
ahead. Many people feel that they
can’t move-up due to how much value their current home might have lost in value
but they couldn’t be further from the truth because, although their current
home has gone down in value, so has the home that they are buying. Let’s say that your home is currently worth
$300,000 in today’s market but was worth $550,000 at the peak. Let’s also speculate that the home you are
buying is currently priced at $500,000 but was worth $900K during the go-go
days. In this example, you “lost” $250K
on your current home but “saved” $400K on the new home. This nets you a gain of $150,000.
Focus on the long term: Let’s assume
for the sake of argument that homes will increase by 50% in the next 10 years
(the actual amount of the increase doesn’t matter – the principle is still
sound). Your current home would then go
from its current value of $300K up to $450K, a gain of $150,000. However, your new home would go from $500K to
$750K, an increase of $250,000 netting you an additional $100,000 in REAL, TAX
FREE money when you sell! Many people
think that the Metro Atlanta market will double in that time frame making the
financial benefits even greater.
Consider the lifestyle change: Moving
up in today’s market gives you an amazing opportunity to purchase a home that
might never again be in your price range.
With the purchase comes larger homes, more amenities, better
communities, etc. Although I have always
felt that the financial component of a home purchase needs to be considered
deeply, we cannot completely overlook the lifestyle component. Basically, think of how you will feel each
and every day as you pull into the driveway of your new home.
Current home conversion: Although most people sell their current home
before buying a new one, it might be worth considering keeping your current
home as a rental property. This will
allow you to “ride out” the market on your current home so you don’t have to
sell near the bottom and you get the best of both worlds. This strategy is not for everyone and does
bring with it some risks so be sure to speak with a qualified mortgage planner
and Real Estate professional about all of the various components of this option
since it is not for everyone
When to list your current home for
sale: You should plan to put your
home on the market before you buy. This way you will not find yourself at a
disadvantage at the negotiating table, feeling pressured to accept an offer
that is below-market value because you have to meet a purchase deadline. And if
you find another home to purchase before your home is sold, make an offer that
is contingent upon the sale and close of your current home. If you've already
sold your home, you can buy your next one with no strings attached. If you do
get a tempting offer on your home but haven't made significant headway on
finding your next home, you might want to put in a contingency clause in the
sale contract which gives you a reasonable time to find a home to buy.
Failing to coordinate closings: With
two major transactions to coordinate together with all the people involved such
as mortgage experts, appraisers, loan officers, title company representatives,
home inspectors or pest inspectors the chances of mix-ups and mis-communication
go up dramatically. To avoid a logistical nightmare we will work very closely
with you to avoid any problems.
Did you know that Custom Mortgage Services can raise your credit score in 3 to 5 days by getting your credit score rescored at the repository level (Experian, Equafax, Transunion).
Documentation must be provided to correct an error or add an update to the Credit Report. This may be as simple as getting the Credit Report to reflect a current account balance. This has the potential of increasing a credit score 20 points.
The following guidelines must be provided in order to get the credit report updated.
Examples of acceptable documentation include:
Examples of documents that will not be accepted:
Raising your credit score can save you THOUSANDS of dollars when obtaining a home loan!!!!