There are endless resources available targeting first-time homebuyers. These articles of information aim to provide homebuyers with relevant advice on all they need to know about buying their first home. When it comes to buying your second home, you will be faced with a new set of challenges that you will need to be adequately prepared for. That is to say, while you will be more equipped to handle the home buying process, there will also be new ground to cover. Some of the things you will have to comprehend with include how you will sell your first home and how to get a down payment for your second home. Here is some information on how buying your second home is different to your first.
One of the biggest differences is that when you are buying your second home you will have equity to use. When buying your second home you will not have to struggle putting a down payment together. This is because you can use the equity in your current home as a down payment. This could be sufficient to pay the deposit for your second home. The more of a down payment you can pay the better. This could ultimately save you lots of money in the long-run as you will not have to pay mortgage insurance.
You will have a home to sell
If you have not already sold your first home, this could make it extremely hard to pay a down payment on your second home. If fact, selling and buying a home at the same time is a mammoth undertaking that is both complex and complicated. So, should you buy a second home first, or sell your current home first? The decision whether to sell or buy first will rest primarily on a number of factors. Some of these considerations include your financial situation, as well as the nature of the real estate market. Your motivation to leave your current home will also play a crucial role in your decision to buy or sell first.
Pre-qualification for a mortgage
It is important to keep in mind that the real estate market is constantly changing. As such, while you might think you might know all about the mortgage package you can afford based on your current mortgage, things are never the same. Your credit, income, and lending environment are dynamic and therefore constantly changing. In addition, you might have changed jobs since your first mortgage, or interest rates might have changed. The whole premise of pre-qualification is to know exactly what mortgage you qualify for.
No extra assistance
Perhaps you benefited from incentives designed to help first-time home buyers purchase their first home. Unfortunately, you will not be eligible for any first-time home buyer incentives when buying your second home. This means that buying a second home will be more expensive.
One the greatest benefits of purchasing a second home is that you have amassed knowledge from your first home purchase. This knowledge will help you understand better what you want in a home. Use all the wisdom gathered in buying your first home and use it to your advantage when buying your second home.