MOVING / BUYING YOUR NEXT HOME
Your next home comes with a different set of questions.
You’ve bought a home before. But buying your next home can be more complicated.
How much equity will you have after you sell? What happens to your current mortgage? Should you buy or sell first? Can you port your mortgage? What if the closing dates don’t line up?
Before you start seriously looking, let’s understand the numbers and build a plan for the move.
No pressure. Just a conversation about where you are, where you want to go and what the numbers could look like.
Your Next Home Starts With the Home You Already Own
When you bought your first home, the financing picture was relatively straightforward:
How much could you afford?
This time, there are more moving pieces.
You have a home.
You have an existing mortgage.
You’ve likely built some equity.
And all three can affect what your next purchase looks like.
Before deciding what price range to search, we’ll look at the whole picture and answer the questions that matter:
✓ What might your current home contribute toward the next one?
✓ How much do you still owe on your mortgage?
✓ What happens to that mortgage when you sell?
✓ How much additional financing might you need?
✓ What purchase price are you comfortable with?
✓ How could the timing of your sale and purchase affect the financing?
How Much Equity Could You Bring to Your Next Home?
The equity you’ve built in your current home can play an important role in your next purchase.
But your home’s value minus your mortgage balance isn’t necessarily the amount you’ll have available for your next down payment.
There may also be costs associated with:
- Selling your current home
- Paying out or changing your mortgage
- Legal fees
- Moving
- Buying and closing on the new property
- Repairs, renovations or immediate expenses at the next home
That’s why I prefer to look at your estimated net position after the sale, rather than simply relying on your home’s estimated value.
From there, we can start building a more realistic picture of what your next-home budget might look like.
What Happens to Your Current Mortgage When You Move?
This is one of the first things I’d want to look at with you.
Depending on your existing mortgage, lender and the home you’re purchasing, there may be different options to consider.
For example, your mortgage may have portability features that could potentially allow you to bring some or all of your existing mortgage to the new property, subject to your lender’s requirements.
Or it may make more sense to arrange entirely new financing.
Before you make assumptions, we’ll look at:
Your current mortgage balance
Your existing rate and remaining term
Whether your mortgage is portable
Potential costs associated with breaking your mortgage
How much additional financing you may need
What the alternatives look like
The goal is to understand what you already have before deciding what you need next.
How Much Can You Afford for Your Next Home?
Having equity can significantly change your buying position.
But that doesn’t mean the equity should determine how much you spend.
When we look at your next-home budget, we’ll consider both:
What could you qualify for?
and
What are you comfortable spending?
Those aren’t always the same number.
Your new mortgage payment still needs to fit alongside property taxes, utilities, maintenance, savings, family expenses and everything else you want your life to include after the move.
The goal isn’t simply to get approved for the next house. It’s to be comfortable living there afterward.
Should You Buy First or Sell First?
This is one of the biggest questions homeowners face when they’re thinking about moving.
And there isn’t one answer that’s right for everyone.
If You Buy First
You’ll have certainty about where you’re moving, but you’ll also want to understand what happens financially if your current home hasn’t sold by the time you need to close.
If You Sell First
You’ll have a clearer picture of the proceeds available from your sale, but there may be more pressure around finding and closing on your next property.
Your Realtor can help you understand the real estate market and develop your buying and selling strategy.
I can help you understand the financing implications of those choices.
That way, you’re not making a real estate decision without knowing what it could mean financially.
What If Your Closing Dates Don’t Line Up?
Selling one home and buying another doesn’t always happen on exactly the same day.
You may find your next home before your existing property closes, which can create a timing gap between when you need the funds and when the proceeds from your sale become available.
Depending on the circumstances, there may be financing options that can help manage that gap.
The important thing is to identify the issue before closing day.
If you’re starting to think about offers and closing dates, let’s make sure you understand how the financing pieces could fit together first.
Moving Up, Downsizing or Simply Ready for Something Different?
Your next home doesn’t necessarily mean a bigger home.
Moving Up
Maybe your family has grown, you need more space or you’re ready for a different type of property.
Downsizing
Perhaps you’d like less space, different expenses or an opportunity to use some of the equity you’ve accumulated.
Moving to a New Community
Work, family, lifestyle or affordability may have you considering a move to another community.
Starting a New Chapter
Sometimes the house that worked perfectly for one stage of life simply doesn’t fit the next one.
Whatever is motivating your move, the financing should support what you’re trying to accomplish, not determine it.
Let’s Put the Pieces Together
01. Talk About the Move
We’ll start with where you live now, why you’re considering moving and what you’d like your next home to look like.
02. Review Your Current Home & Mortgage
We’ll look at your existing mortgage and get a clearer picture of the equity you may have available.
03. Understand Your Next-Home Budget
We’ll consider your income, debts, available equity and anticipated costs to better understand what you could afford.
04. Build a Plan
You’ll know more about your financing before you start making major decisions about selling, buying, offers and closing dates.
Thinking About Moving in Wilmot or Waterloo Region?
Let’s understand the financing before you start looking.
Whether you’re moving within New Hamburg, heading elsewhere in Wilmot, moving toward Kitchener-Waterloo or Stratford, or coming into the area from another community, understanding the financing early can make your move much easier to plan.
I’m based in New Hamburg and help homeowners understand how their existing home, current mortgage and next purchase work together.
You don’t need to have your home listed.
You don’t need to know exactly what your current home is worth.
And you don’t need to have found your next property.
We can start with what you’re considering and work from there.
Not Ready to Put the For Sale Sign Up Yet?
That’s actually a great time to talk.
You don’t need to wait until your home is listed or you’ve found the next property.
If moving is something you’re considering in the next few months, we can start by looking at:
- Your current mortgage
- Estimated equity
- Your finances
- Potential next-home budget
That gives you useful information before you’re under pressure to make decisions.
No application. No pressure. Just a conversation about the numbers.
