How Could You Trade Up Your Home In A Volatile Real Estate Market?
Many of us might have thought about selling our home and getting a better place while the real estate market is still down. Nonetheless, we have pondered we have to sell our house at a relatively lower price and yet there are no real purchasers. Then, even if our home is sold, then we have to become qualified for a new mortgage in this tight lending market. The line of reasoning continues, we might end up either homeless or not getting qualified for a new mortgage and eventually settle in a relatively worst home. There is no question, this line of reasoning has some merit. Nonetheless, there might be ways at least to try to take advantage of the volatile real state market. Let us ponder some of the ways.
DETERMINE IF YOU HAVE AN ASSUMABLE MORTGAGE
About 40% of US homes have assumable mortgages. Assumable mortgages allow the purchaser to avoid enduring some of the cumbersome procedures associated with being qualified for a new mortgage. The buyer steps into shoes of the seller with often the same rates and monthly payments. However, in general, the original lender still has to agree with such assumption. There might be a fee for the assumption and the seller MUST obtain a release from the lender. In addition, the lender, in order to agree to the assumption, might require the purchaser to undergo some credit checks to ensure the purchaser is capable of paying the monthly payments for the duration of the loan.
However, buyers usually would not have to pay for closing costs and if they can become approved by the lender they are spared some of the harrowing experiences of becoming eligible for a loan, hopefully.
DETERMINE IF YOU WILL SAVE OR NOT DOWN THE ROAD
This is very important to calculate all your expenses while staying at your current home including but not limited to mortgage payments, property taxes, home insurance, maintenance and utilities. The question is then given these expenses and benefits of moving to a better neighborhood, would you be better off in long-term staying at your current home or moving at a better house with a better safer school district and other amenities?