How to manage two mortgages at the same time for second-time home buyers
Knowing how to buy a home while trying to sell your existing home is a task that not everyone is prepared for. To learn how to juggle two mortgages at once or how to be a homeowner that is taking out a second home mortgage there are a few things to keep in mind along the way.
For starters, anytime you buy a home you need to stick to your budget. If you don’t, you could run the risk of overextending yourself which could lead to bills that you are not able to pay.
A few rules you’ll want to live by are:
- Set an amount that you can afford and don’t spend over that amount.
- Communicate with your Omaha real estate agent about your budget.
- Stay away from bidding wars, it’s a trap for going over your budget.
- Find houses that aren’t selling on the market. Whether they are overpriced or need some work, it could be a good way to get a good deal on a home!
A great way to earn a second income while waiting for your home to sell is by renting while you wait! By renting your home out, you can keep your finances in order and feel less pressure to sell your home quickly.
In order to rent your home to cover the cost of a second home mortgage, you need to find trustworthy renters that are willing to move at a moments notice.
Find a good tenant by advertising in newspapers or with an online posting. You could even go old school and spread the word throughout your neighborhood!
It’s important to understand who will be living in your home for the time being. One can run background checks by pulling up credit reports, criminal history and contact employers.
Protect yourself and the tenants by having a written lease for each party to sign.
Get property insurance.
Have a plan put in place in case you need to evict a tenant.
Think about refinancing!
What is refinancing a home? As one way to lower your monthly payment on your home is to refinance. In other words, refinancing is getting a new mortgage to replace the original one.
However, before you refinance your home, there are things you should consider: do you want to start all over with your payments, meaning do you want to keep paying for your home for a 30-year term. Another question you need to ask yourself is, do I mind having a higher interest rate? If all of these things don’t bother you, this is a great option for financial security.
However, if you are waiting for your home to sell on the market you could always consider a bridge loan that will help you pay for both homes until one sells.
If all else fails, you can always consider selling!
There’s no harm in selling one house to be more financial sturdy. Afterall, most people don’t own two homes at one time if they can help it!
If you are currently in a position where you are the owner of two homes, don’t fear. You have plenty of options to choose from.
Are you looking to buy a second home? If so, please contact The Fairfield Team and let our real estate professionals help you navigate the process of buying your second home!