Tips for Coordinating Your Move
When it comes to trading up, you really need to have a feel for how you want things to go. Your goal is to get from one home to the other – without a stop in temporary housing in between or ever getting stuck with two mortgage payments.
People manage it all the time, and you can, too. Here are some of the things I tell my mortgage customers when they’re wrestling with this dilemma.
The new construction advantage.
In all honesty, when it comes to trading up, I think there’s a logistical advantage to buying new construction. I might be oversimplifying a bit, but hear me out.
- You find a home and builder you like
- You sign your purchase agreement
- You find out when your home will be ready
- And you make your plans around that date
If your new home is being built from the ground up, you have anywhere from five to nine months to get your current house ready for sale. What’s more, your real estate agent can give you an idea of how long it will take to sell your current home. You can then be very strategic about when you list your home for sale.
Plus, you can control when your current home’s new owners take possession. For example, you can make it for a day or two after you move into your new home.
Worried about financing this way? Your lender can help you tap into your current home’s equity to cover the earnest deposit, down payment and closing costs on your new home. Once your current home sells, you pay off the equity or bridge loan – and then begin your monthly mortgage payments. It’s really pretty simple.
The case for selling first.
If you don’t want new construction or your situation isn’t that clear cut, keep in mind the advantages of selling first.
- You avoid the potential burden of maintaining two houses at the same time.
- You get a clear financial picture before investing in a new home.
The case for buying first.
While selling first feels safer, if your mortgage is completely paid off you may feel just as comfortable buying first.
- You avoid the need for temporary housing and storage.
- You avoid the need to move twice – to temporary housing and then again to a new home.
Coordinating a trade-up may feel complicated. By working closely with your real estate agent and lender, though, you can come up with an approach that will work for you.
Home Buyer's Guide to Trading Up
Fili Sanchez (NMLS #528671) is the Vice President and Mortgage Relationship Manager for our Kearney, Riverdale, Burwell and Ord markets. He has been with Heartland Bank for 10 years and has 15 years of mortgage lending experience. He is also a recent graduate of the Advanced School of Banking. Fili enjoys participating in the community with the Kearney Area Chamber of Commerce, Leadership Kearney, Nebraska Banker's Association, and serves on the board for the Yanney Heritage Park Foundation. Outside of the bank, he enjoys spending time with his wife and three children, traveling to kids' sports activities and family vacations.
