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Moving Up: Selling Your First Home and Buying Your Second

Selling your first home to purchase your “forever home” is exciting! When you bought your first home you were probably young, low on cash and had to give up some amenities to afford your own place. Now, you are older, most likely have some savings to work with and are ready to move into a home that is as unique as your needs and lifestyle. Here are a few suggestions that will help you find your forever home.

Figure out your reason for purchasing a new home.

Are you purchasing a new home for more space for the kids? A bigger backyard for your dog? Maybe, you just want a place that has all the cool gadgets like a wine cooler in the kitchen, granite countertops and walk-in closets? Whatever the reason may be, figure out your logic for purchasing your new home and make sure you don’t compromise this time around—you will regret it big time!

Make sure you can afford a new home.

Moving into a nicer home can incur more costs than when you purchased your first home. Be sure you take these costs into account:

  1. Determine how much selling your first home will cost and don’t forget to calculate things like cosmetic upgrades to make your home more appealing to buyers and hiring a Realtor to sell it.
  2. Don’t forget about moving costs like hiring movers, a moving truck and paying for storage if your move-in and move-out dates don’t align.
  3. Schedule a home value appraisal to determine the selling price of your current home and calculate the difference with this  mortgage affordability calculator.

Decide how you will shop for your new home.

Sell First

This method is great if you can’t afford to pay two mortgages at the same time. However, you will need to sell your existing home first and calculate for storage fees and alternative living arrangements while you shop for your new home.

Buy First

This method is great if you have a little extra cash saved up and if the homes in the area you want to buy are selling fast.  This way, you can live in your current home and have the flexibility to shop around for as long as you need. However, you will most likely have to apply for a bridge mortgage or gap mortgage—a short-term loan taken out against your current home, to finance the purchase of your new home.

Time It Out

This is the best situation to find yourself in, but it is the most unlikely to happen. This method allows you to move-out of your current home and move-in to your new home on the exact same day. You will have to put in a lot of planning to persuade the person you are buying your new home from and the person you are selling your current home to agree on the move-in and move-out date of your choice.

Finding your dream home doesn’t have to be overwhelming, especially if you have a great team to guide you through the process. We have many local mortgage loan originators that specialize in move up buyers, waiting to help you plan for this major financial move!

Stop dreaming, start buying.