Rebecca Richardson - Mortgage Consultant
How to Handle the Unexpected Twists of Homeownership
The homebuying process and homeownership can both feature some unexpected twists and turns along with some nuances that you might not be aware of. In this blog, I’ll outline three unique and unexpected outcomes of the homebuying process & homeownership and the ways that you can handle them.
How to Buy if You Have a Home to Sell
Buying your first home is an exciting investment which will pay dividends down the road. But most of the time, that first home won’t be your forever home. So how does it work when it’s time to sell that first home and buy a new one?
There are a few considerations that you should take into account. If you’re buying a new home but are still in the process of selling your current one, you’re going to need to make sure that you can still qualify for a mortgage when factoring in the payments for both homes.
Furthermore, you’ll also want to be sure that you have the funds available for a down payment that come from somewhere other than the sale of your home. When you do eventually sell your other home, you might want to consider a mortgage recast; this involves paying a large sum towards your mortgage’s principal to lower your monthly payment.
Ultimately, buying and selling a property will always come down to careful planning and adequate research on your options. Don’t hesitate to reach out to an expert, like me, if you have any questions regarding the process!
Why Did Your Payment Change if You Have a Fixed Interest Rate?
Here’s something you might not have considered when buying a home: although your interest rate might be fixed, that doesn’t mean your payments are too.
More likely than not, you have an escrow account to pay for your taxes or homeowner’s insurance. And with an escrow account, your payments may fluctuate year-to-year.
This is because the taxes and insurance associated with your home can change each year, resulting in a fluctuation of your overall mortgage payment.
It’s not all doom and gloom, though. Your mortgage company manages your escrow account for you. When they report these changes back to you, all you’ll need to focus on are that your homeowner’s insurance policy is at a competitive price (it’s not a bad idea to shop around for a better price every few years) and that your property taxes are being calculated at the right rate.
At the end of the day, it’s never a bad idea to have some extra money set aside to prepare for the unexpected.
Can Your Down Payment Come from Different Accounts or People?
Making a down payment on a new home can often be daunting since it requires a large sum of cash on hand. I’ve got good news for you though; buyers don’t have to be limited to one particular source when providing the funds for their down payment.
In fact, most lenders accept down payments that come from multiple individuals and accounts. After all, it’s much better for someone to save up from several sources rather than just dipping into a single bank account.
There are a few rules and regulations when it comes to providing a down payment from multiple sources, though. Lenders will need to know the source of the down payment, including confirmation if the funds are a gift from a family member or an allowable donor.
Regardless of how many people are involved or how many accounts are used, there’s usually a way to make it work!
The homebuying process and homeownership often feature their fair share of twists and turns. That’s why preparation is paramount when committing to such a large investment. You want an experienced lender who you can trust in your corner.
I’ve worked with plenty of homeowners from plenty of different backgrounds, so if you’re ready to start this journey or just want to learn more, feel free to reach out!