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BUYING FIRST: RISKS AND OPPORTUNITIES
Imagine you’ve set your sights on a specific home you want to purchase. In that case, it can be tempting to buy first. This prevents you from missing out on the desired property. Ideally, you coordinate the transfer of both properties to avoid double housing costs.
But there are risks. What if your current home sells for less than expected? This can cause problems if you need the equity for the purchase of your new home. A bridging loan may be necessary, but this adds extra financial pressure. Also, double housing costs are a possibility if your old house stays on the market longer than hoped.
Furthermore, it may be challenging to transfer your current low mortgage rate if you buy first before selling your old house. Some lenders impose this condition.
SELLING FIRST: CERTAINTY AND CHALLENGES
Selling your current home before buying a new one provides clarity about the proceeds and your financial possibilities for a new home. The available equity can be used immediately, potentially making a bridging loan unnecessary.
However, you run the risk of temporarily being without housing if you don’t find a new home right away. This could mean double moving and arranging temporary accommodation. Additionally, you risk the desired new home being sold if your old house needs to be sold first.
HOW TO MAKE THE RIGHT CHOICE?
Which choice is best depends on your personal situation. Consider the following questions:
- Do you already have a specific home in mind that you want to buy?
- What is your financial situation? More financial space means more flexibility in case of disappointing sale of your current home or double housing costs.
- How attractive is your current home to the market? Strong demand for your type of home can reduce the risks of selling first.
Before making a decision, it’s advisable to have a conversation with a mortgage advisor. This will give you insights of your options, new monthly expenses, and the best steps to take. This will help you make an informed choice between buying first or selling first.
Considering a new step in the housing market? We, as experienced real estate agents, can assist you with personalized advice. Let’s explore your options together during a no-obligation consultation. Feel free to contact us!
Disclaimer: The choice between buying first or selling first depends on individual circumstances and risks. Professional advice is recommended before making decisions.
