You’ve navigated the home buying process once before so this second time around should be a breeze, right? Not quite! Depending on when you first bought your current home, you may be surprised by how things have changed. While second-time homebuyers generally have the benefit of experience, there are some new challenges that are unique to the second-time buying process.
Saving a down payment
One thing hasn’t changed: you still need to save for a down payment. It can be more difficult to save for a down payment the second time around since you’re not able to tap into an IRA like some first-time homebuyers are able to. Plus, life can get more complicated as we get older, making setting aside money harder. Budgeting remains the most common way to save for a down payment because it works. Automating your savings makes this painless. However, you do have the benefit of using the proceeds from selling your current home to fund your down payment. Here are a few other ways you can save for a down payment.
Financing your second home will be a bit more complicated than when you purchased your first home. You may have noticed that lending qualifications have changed, especially if you purchased your home before 2008. Lenders may require higher credit scores to qualify for a mortgage than before. The debt-to-income – the total amount of your monthly debt payments divided by your gross monthly income allowance is lower than before. Another change that can work in your favor: you can now go through the mortgage qualification process online. This gives you the ability to shop around for a favorable loan package.
Deciding on a selling strategy
The home buying process can be more complicated when you need to sell a home at the same time. Most home buyers find carrying two mortgages is a lot to handle. Second-time homebuyers need to decide whether they want to sell their current home first or buy their new home first. A trusted real estate agent will be able to advise on the best strategy based on the current market.
The Homebuying landscape has changed
Technology has changed how we buy and sell homes. Online listing services have made it possible to see new listings as they become available without solely relying on your realtor. Get comfortable using technology to supplement your home search, from signing up for email alerts so you’re notified when a new home that fits your parameters becomes available, viewing virtual tours, and more.
Whether moving up to a larger home or downsizing to a smaller one, second-time homebuyers will face some unique challenges that must be considered. Despite the challenges, previous experience is the trump card. You know what to expect and what you need so you can be confident in your decisions.
Are you ready to wade back into the home buying process? Start your home buying journey by visiting us at SummerHillHomes.com to view available homes, virtual tours, and schedule a private tour. Get ready to find your new home!