Should you stay or should you go? That is the question and one that many homeowners are asking themselves today. So how do you know when it’s time to buy something new or stay where you are?
WHEN TO STAY
YOUR MORTGAGE IS ALMOST PAID OFF. You are almost done with monthly payments and about to own your home outright. Buying a new home may mean taking out a new mortgage. Unless you are planning to downsize or your net cash proceeds would cover your new home, buying would mean taking out a new mortgage. Experts recommend staying put.
YOUR CREDIT STINKS If you are not going to qualify for a new loan because of bad credit or if you barely qualify which would mean putting more money down and a higher interest rate, it may not be worth it to move. Fairly recent lending regulations means getting a mortgage is more difficult than in years past. Lenders will closely review your income, debts, assets, and liabilities to make sure you are absolutely able to make your monthly payments. Hopefully you have not done any damage to your credit since you last purchased your home as the most favorable interest rates are afforded to those with credit scores over 700. Work to repair your credit and stay put.
YOU HAVE MONEY TO RENOVATE Your home looks like the set of the Brady Bunch or your “deferred maintenance” has become clear you simply let your home fall apart. Depending how much cash you have or equity in your home, you can choose to renovate. Even small changes can make a big difference and make your home functional for you again. Be sure to consult your Realtor as to what changes you plan to make. Not all upgrades are equal when you do finally plan to sell and move to your next dream home. If you can improve your living space within your means you may want to stay put.
THERE IS NO INVENTORY IN YOUR PRICE RANGE The tighter your parameters the harder it can be to find the right home for you. If you need to be in a certain school district, want the master bedroom on the first floor or you just have to have a patio with a view of Mount Evans, you may want to stay put in this market.
WHEN TO GO
THE KIDS ARE GONE Nostalgia aside, do you really need all that space and upkeep? If you find yourself wandering a large house wondering what to do with the kid’s bedrooms or do I need to clean that 3rd bathroom next month, you have too much house. With the equity in your home you may be able to buy your newer, smaller dream home for cash. Downsizing in this hot seller’s market means it’s time to go.
YOU CAN CASH OUT AND CASH IN All that equity you have in your house can be rolled into a new loan to buy you a larger and more updated home. Over the past couple years homeowners have profited significantly from the increase in their home values. Coming to the table with more cash can also mean lower interest rates than you may be paying now. Go.
IT WOULD TAKE TOO MUCH TO RENOVATE Everyone’s patience level is different but have no illusions, renovating a home you are living in is disruptive and time consuming. It can also be more expensive than you first thought. My rule of thumb from experience, figure twice as long and twice as expensive as you planned. If there are just too many things needing to be done to get your home to where you want it or if you are looking to spend the next 2 years with contractors and drywall dust, save your money and your sanity and go.
LOW INTEREST RATES Money is still cheap but seriously for how much longer? Interest rates are inching up and are sure to go higher when the new lending laws come into effect in late 2015. If the house you are in today is just not going to be the right one tomorrow. You should go.
Author:Jeff McGahey Phone: 720-309-2059 Dated: July 31st 2015 Views: 848 About Jeff: As a Colorado native, real estate broker since 2006, and real estate investor for over 15 years I ha...
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"My experience with Jim and Ion real estate has amazing. Jim is wonderful to work with. He listened to my challenges and offered suggestion on how to bring my score up to the 640 I would need for a loan to do repairs on the house I am interested in purchasing.
I have been working very hard on making a change in my finances so I can purchase a home in Bailey and it is a pleasure to feel hopeful that this will happen.
I am so grateful to Jim for listening and helping me understand the process.