If you already own a home and you want to buy the next one, you’ll be surprised at how buying the second home is more straightforward than the first one. It’ll be like you are walking on a beaten path, having learned from the mistakes you made during the first purchase.
One of the most important things you’ll appreciate is how your expenditure will go down when buying a second home. Here are some reasons why buying your next home will require less money.
You Already Have a Home to Sell
If you are buying a new home to live in, you’ll already have your old home to sell. This can help you raise the cash needed to buy the new home or make a down payment and part payment for the new home. Even if you are forced to take a mortgage, you won’t have to take as much as you’d take if you were starting from zero.
Having a home also puts you in the best position to negotiate for the best prices since you won’t be in a hurry to get the new home. This will ensure you spend less than you’d have spent if you were desperately looking for a home to buy for the first time.
Make Use of Equity
When purchasing a home for the first time, you’ll have to look for the down payment, which can be as high as 20% of the purchase price. The good news is that if you already have a home, you don’t need such a huge down payment because you can fund your second home by using the equity in the existing home. The equity amount will depend on the value of your current home compared to the original value at the time when you bought it and how much mortgage you’ve paid. If your second home is more expensive than the first, then you’ll have to top up the equity.
You Understand the Home Buying Process
Understanding the home buying process is perhaps the greatest advantage you’ll enjoy when purchasing a second home. You’ll approach the process backed by the experience drawn from the first purchase. You’ll understand better what you are looking for, where to get it, the mistakes to avoid, and how to avoid unnecessary expenses. You’ll already know the mortgage company and the realtor to work with. All these will reduce your expenses since you won’t have to move around searching for realtors and mortgage companies.
Financing the Second Home
There are many home financing options available for home buyers. Most people use mortgage loans. These loans attract different interest rates and have different requirements in terms of down payment and credit scores. Having bought the first home, you’ll have an experience of choosing the most affordable financing option.
As you can see, buying the first home is more challenging than buying the second home. Drawing from your experience in buying the first home, you can spend less money when buying the second home. If you aren’t sure how to go about buying homes, contact Belay Mortgage company.