Congratulations! You are looking to buy your new mainline home; but are you planning to sell at the same time? Good news- Buying a new home that is customized perfectly for your wants and budget allows you time to work the process in tandem with the sale of your existing home. Here are some options and some tips to ensure you get everything in place to purchase your dream home!
1. Buy first, then sell
This option might be the best for you if you own your current home and have enough equity or a manageable mortgage payment that can allow you to take advantage of more immediate buying opportunities, such as the last homesite in a community, or special promotions. A new home often takes seven to twelve months to complete. So, unlike a used home that often carries with it expectations of a 30-or 60-day close, you have time to reasonably address the logistical challenges of selling or preparing to rent your existing property in tandem with the preparations for moving into your new home. Not to mention avoiding the myriad of compromises associated with a used home such as aging appliances and systems, imperfect colors or selections, inadequate specifications and imperfect design.
2. Sell first, then buy
This is always an option that is available to new home buyers with an existing home to sell, however, while it may seem to be prudent and conservative there may be hidden costs associated with this method. These include the potential for rising interest rates, increased sales prices, and loss of available choices in homesites or other preferences. You can most often lock in an interest rate as soon as you have a contract for your new home, whereas waiting keeps you from being able to do so.
In an example of waiting 4 months to sell your home first-
- Interest rates rise from 3.5% to 4.5% — a cost of $500/month per $500,000 of mortgage.
- Home price increases.
- Home site selections decrease.
- Monthly payment goes from $2,250/month to $3,000/month – a very costly four-month decision.
So weigh your options carefully and understand both the obvious and potential hidden costs associated with selecting how best to proceed, but with either choice, congratulations on finally fulfilling your dream of having a new mainline home.