Everybody has advice for first-time homebuyers. But what about those who are buying a home for the second time? While wading into the real estate market for the first time can be intimidating, that doesn’t mean you’re suddenly a pro when it’s time to buy your second home. In fact, being a second-time homebuyer presents its own set of unique challenges. If you’re preparing to buy your second home, then here are some tips you should keep in mind.
Figure out what to do with your current home
Buying a home for the first time can be scary. But when you do it for the second time, you also have to figure out what to do with your current home. Will you sell it or rent it? If you’re selling, will you try to sell at the same time as buying a home, or wait until after you’ve made your purchase? There are many factors to consider when making this choice, including how much money you have saved, local market conditions, and how much you feel you can handle at one time.
Don’t rule out an FHA loan
While most people think that FHA loans are specifically for first-time homebuyers, second-time homebuyers can utilize them as well. However, you must meet all the criteria including credit and down payment requirements. Generally, you cannot use an FHA loan for an investment property or vacation home. But if you are looking to relocate permanently in your next home, it’s worth looking into this type of loan.
Determine how you’ll make the down payment
How will you make the down payment for your second home? For many second-time buyers, they rely on the sale of their first home to make the down payment on their next home. But if you’re waiting to sell your current home, you’ll need to make sure you have enough saved for your down payment. And take into consideration that unless you have at least 20 percent of the purchase price saved, you’ll be paying PMI (private mortgage insurance).
Evaluate your current needs
Your needs have probably changed since you bought your first home. For this reason, you should take time to reevaluate what you are looking for in a home. This year, many homeowners have decided to upsize since they are now working from home or they have children who are attending school online. Sit down and make a list of your priorities so that you can focus your search on homes that meet your current needs.
Even if you think you’ll be living in your new home for the rest of your life, things can change. After all, nobody really expected that we’d all be staying at home for almost all of 2020. We don’t know what the future holds, which is why it is important for you to consider how easy it will be to sell this home down the line. There may come a day when you thank yourself for it.
Work with a professional
Finally, take some of the stress off your second-time home purchase by working with a professional real estate agent. They can offer advice and expertise every step of the way to make your second-time home-buying experience as smooth and stress-free as possible.