Top Tips of 2022: Homeownership
Review 2022's most popular articles to help you buy (or sell) a home in today's market.
Want or need to buy a house while you have a current home to sell? You will need to think strategically. Review these two options to learn which choice makes the most sense for your situation.
1. Sell first, then buy. Chances are, you get the equity out of your current home to help make a down payment on your next home. From negotiating your closing date to creating a contract contingency, (Your new house purchase is contingent on selling yours), you have options to avoid paying two mortgages.
2. Buy first, then sell. If you need to find a new house quickly to relocate for a new job, or want to make an offer before it sells, you have options─from adding a contract contingency to applying for a bridge loan, you can minimize your financial burden and decrease your risk.
What's the best approach to buying a home in a competitive market? Here are 6 proven strategies to help you gain an edge over other potential buyers.
- Get pre-qualified for your mortgage.
- You may qualify for special programs that can reduce your down payment or lower your rate.
- List your needs and wants. ("Needs" are non-negotiable features you must have in your next home. "Wants" are features you'd like to have but would be willing to compromise on.)
- Stay in touch with your Realtor and Loan Officer.
- Make a strong offer.
- Stay focused on your goal.
If you’ve built up equity in your home—if it’s worth more than the balance on your mortgage—you may be able to use part of that value to meet financial needs. Home equity lines of credit (HELOCs) and home equity loans are two ways to achieve similar ends, but they offer different advantages.
A home equity line of credit (HELOC) is a revolving credit line, similar to a credit card. You can spend against your credit line and make payments monthly to free up available credit. Interest rates for home equity lines of credit may be fixed or variable. You pay interest only on the part of your credit line you're using.
A home equity loan is a lump sum of money you can borrow, typically at a fixed interest rate. You receive a lump sum of money all at once with predictable monthly payments.
Even if you’ve just started thinking about selling your house, making home improvements can be beneficial for many reasons. There are smart ways to maximize your home’s resale value with projects that instantly increase the overall value of your home.
- Make repairs first. If your roof leaks, your plumbing is out of order, or safety hazards exist in your home, you should prioritize these types of repairs before you begin other projects.
- Keep up with the “comps.” Compare your home to similar homes for sale in your neighborhood.
- Know the latest trends.
- Prioritize the pretty. Focus on improvements that will entice buyers when they look at pictures of your home.
- Do your research.
Sellers are looking for an offer that creates a clear path to selling their home, with minimal obstacles or complications. Learn how to write one that gets noticed in a hot market.
1. Make sure the price is right. Depending on how quickly homes are selling in your area, you may need to set your price at or slightly above the list price to get a seller's attention.
2. Show proof of pre-qualification. Work with a mortgage lender to get pre-qualified before beginning your home search.
3. Offer more earnest money. A typical earnest money deposit is 1% to 3% of the purchase price.
4. Waive certain contingencies. It can be risky, but could help make your offer more attractive to the seller.