An important question in the mind of home owners is how long they should stay in their current home, in order to build up equity, before dipping into the real estate market and investing in a new home. A good approximation would be five years, as this gives the home owner enough time to build up sufficient equity to cover the future costs of closing on a home while still having enough equity available to make the purchase an affordable option.
Search Realty offers three important tips to those home owners thinking about investing in a new home.
The first thing the home owner should understand is that when buying a new home, there are certain expenses that will need to be covered. These include legal fees, moving costs, cost of a home inspection, related fees and more. It is vital that the home owner makes certain that they have these costs covered, so that they don’t end up losing money in the transaction.
The second tip is actually something that the home owner should already be doing. Paying the mortgage on time, all the time.
The home owner should remember that when they first applied for a home loan, it was more than likely a lengthy and cumbersome process. The second time around shouldn’t be, so long as the home owner has been making mortgage payments on time every month. The hassle that the home owner may have endured when trying to get their first mortgage, should no longer be an issue if the home owner has proven themselves fiscally responsible. The home owner should be aware that, in most cases, it is a lot easier to step up to a second home than it was to make the giant leap forward to buy the first home.
Timing is everything when it comes to real estate. If a home owner needs any help deciding whether now would be a good time to reinvest in a new home, their best bet is to first talk to a real estate expert. Sometimes, the wait is worth it, but at other times, it would be beneficial to take the leap forward and invest in a new home.