In today's housing market, figuring out how to buy your next home before selling the one you're in can seem tricky. With interest fluctuating and a market that still favors sellers, it's all about having the right plan. Let's break down three straightforward strategies that can help you use the value in your current home to move into a new one sooner rather than later.
1. Recasting Your Mortgage
Recasting your mortgage is like hitting a refresh button on your monthly payments. Recasting adjusts your loan balance after you’ve thrown a large sum of money at it, usually from the sale of your previous home. This big payment lowers your remaining balance and, as a result, your monthly payments get smaller too. It’s different from refinancing, which is when you get a completely new mortgage with hopefully better terms, like a lower interest rate. Recasting keeps your current mortgage but adjusts it to reflect that big payment you made. You won't have to worry about changing your interest rate, which is great if you've got a good one. This process is usually pretty simple and cheap to do.
2. Using Bridge Loans
If your house is already up for sale or you need to buy quickly, a bridge loan can help you get there. Yes, they're a bit pricier because of upfront costs, but they give you fast access to the equity in your home. This makes it easier to buy your next place. It's worth thinking about, especially if it means you can move straight into your new home without getting stuck with a long-term mortgage. Sometimes the extra cost upfront can be worth it in the big picture.
3. Getting a HELOC
A Home Equity Line of Credit (HELOC) is a smart way to get money from the equity in your house without selling it first. It's a good fit if you haven't listed your house yet. A HELOC gives you the cash you need for your down payment and lets you sell your old house on your own time. It's affordable, flexible, and a favorite choice for many looking to move to a new house smoothly.
Making Your Move
Choosing the right strategy depends on your situation and where you want to go next. Whether it's the ease of recasting, the quick fix of a bridge loan, or the handy cash from a HELOC, each method has its perks. These strategies are all about making the most of your home's value to help you move on up to your next place. By tapping into the equity you've built up, you can make your next home purchase happen sooner and with less stress.
If you're in the San Ramon Valley and taking these decisions into consideration, Emre Turanalp, a trusted Realtor®, can connect you with the valuable professionals you need. These experts can guide you through your best options, making the process smoother and more understandable. Ready to explore your possibilities? Connect with Emre today and make your move with confidence.
