FAQ: How to Buy Your Next House
If there is any one law in real estate, I would say: “No scenario is the same.” Every buyer and seller has a unique situation. But I think there’s one myth buyers consistently walk into — and that’s thinking their second home purchase will be the same as the first.
There’s no doubt that our financial goals change over time. Our needs shift, careers get moved around, and we find a different focus in life. With that, it comes time to change our home as well — to match what we’re looking for. So, before you go walking into your second home purchase, here are the answers to questions that typically arise during this time:
What should I consider before buying my next house?
A: With your first home, you may have had to make sacrifices on what you wanted and what you could get. But now that you’re making the move again, ask yourself why you need to buy a new home. Questions like these will help clarify what you should look for:
- Is your family growing or do you plan to have the kids move out?
- Are you looking for a new location/city to call home?
- Do you want certain amenities (or features) that your home is currently lacking?
Once you’ve thought about why you want a new home, you can begin to identify what kind of property you are looking for (which will help us identify the right property for you, as well).
How will my current home impact my purchasing power?
A: Your current residence will definitely affect your ability to buy your next home. Assuming that your house has gained value (and you’ve built equity) over the years, you should be able to sell your home for a higher price point than what you paid for originally. This will help pay off your current mortgage loan, and hopefully, you’ll have extra money to put down towards your next house.
If you can sell your home and gain enough money to put a 20% down payment on your next home, then you’ll have tons of purchasing power. For one, lenders will know that you can regularly make mortgage payments (adding trust in you) and you won’t have to spend money paying for premium mortgage insurance(PMI).
On the flip side, if you’re home hasn’t gained in value (and you have lost equity), then you may be restricted in your next home purchase. It all depends on the market and when you decide to sell. My best advice is to gauge how much you can sell your house for. Get a free home valuation before you commit to anything. Call and check with a local mortgage lender about your financial situation. And definitely consult with a real estate agent that can give you solid advice on today’s real estate market. Armed with this knowledge, you can set the right expectations to what you can buy next.
How much can I afford to buy?
A: Like I mentioned before, your home purchasing power will be determined by your capacity to pay every month (on a mortgage), current debts and credit scores, and what value you can sell your house for. If you want to get a quick look at what you can borrow (i.e. what price range you can afford), I would suggest getting pre-approved on a mortgage loan. You can talk to our local expert more about financial details.
How can I find a home that meets my needs?
A: To narrow your home search down to properties that match your needs, you can customize the options in the search bar (at the top of this webpage). Beyond setting a price range and the number of bedrooms, you can search properties by type (single-family homes, condos, new construction, etc). You can also dive into the architectural style and features of the home by selecting “More” in the search bar. This will help you find the exact home you are picturing in your head.
If you can’t find the home you need, you can always make an account with us and receive weekly updates on new properties, or you can contact us and we’ll help you located your next house.