What are Your Options When Doing a Possible Trade Up for Your Home?
So your family is beginning to grow and you’re quickly finding out your space is becoming smaller in comparison. Maybe your company has decided to become remote full time and you need a spare room for your new home office. The time for you to upgrade your space has now arrived and you might not know where to start. Let me help you!
Depending on your situation there are several options you may choose to do. For one, if you find you have enough capital for a seperate down payment on a new home, your best option would be to rent out your current home. Making it into an investment property will then turn into rental income for you, a great benefit! See if this can be a viable option for you by working with a trusted lender where they will calculate your total debt-to-income ratio to see if this is possible. Be wary however, you many find that you might need to sell your house first which in turn can act as a down payment for your next house. While searching for a place to stay, asking for a rent back can also be a viable option for you rather than staying in a hotel or Airbnb if you choose to do so.
Another option when potentially trading up your home is a bridge loan, buying a new house while assuming you'll sell your other house as soon as you close on the home. That way you won't feel as rushed when you're looking to buy a home. Take note however, that there is a period where you will be responsible for both mortgage payments simultaneously. Borrowing interest rates and initial closing costs will also be much higher, but only for a short amount of time. Keep in mind if you choose to go this route that you do need a large percentage of equity from the previous home for an investor to take a bet on this kind of product.
While you're out looking to trade up your home, be sure to also consider looking into homeowners insurance that best works for you. Check out this article here that will help you on your search! https://money.com/best-home-insurance.