Are you in the process of purchasing a new home and torn between renting or selling your existing one? Here are some key factors you should consider when deciding what to do with your prior property.
Check out my video for a deeper dive into the question of renting or selling your existing home!
Examples used in this video are for illustrative purposes only.
The first and most crucial step in this decision-making process is to create a customized plan for your unique situation. It’s important to recognize that everyone’s financial circumstances are different. As such, what works for one person may not work for another.
To begin, consider the potential rental income from your existing home. A real estate agent can run rental comparable properties just as they run sale comps. This step will give you a clear picture of how much you could earn by renting out your property.
One key factor to consider is how renting your old home will affect your new monthly mortgage payment. We will run you two scenarios comparing, selling with a larger down payment vs keeping with a smaller down payment, resulting in a higher monthly payment. We will see if the rental income derived covers this delta.
You should also factor in the expected home appreciation in your market. Even if your property doesn’t yield significant monthly cash flow, it may appreciate in value over time, allowing you to make more money when you eventually sell it. This is a long-term wealth-building strategy.
If your property doesn’t provide the desired cash flow, it doesn’t mean you can’t invest in real estate. You can sell your existing property, use the proceeds to buy your dream home, and invest in another property with less down payment. This diversifies your real estate investments and opens up opportunities in different locations or property types.
Consider what you can do with the funds from the sale of your property. Currently, some banks offer significantly lower interest rates than they should on savings accounts. With high-interest rates available elsewhere, you can earn more on your cash. For example, a 4.5-5% interest rate on a $100,000 deposit can earn you over $400 a month. This interest can help pay your mortgage or cover other expenses.
This example is for illustrative purposes only.
Ultimately, the goal is to build wealth in real estate and make your money work for you. Let us evaluate your entire financial picture and create a wealth-building strategy using real estate.
My Team and I are always available to answer any questions or assist in any way, so feel free to reach out!
Senior Loan Officer| NMLS #621637
Combining over three decades of industry knowledge, The Johnston Team is thoroughly dedicated to matching each borrower to the perfect loan program.
Team leader Stephanie Johnston began her mortgage career shortly after graduating from The University of North Texas. Utilizing an approach that combines both creative and analytical problem solving Stephanie has built a reputation for offering honest, detail-oriented guidance for her clients. As part of Service First Stephanie has a place to build her team in an environment dedicated to putting borrowers first.
Whether you’re purchasing your fifth home or your first The Johnston Team has the knowledge and experience to find the loan that’s right for you.
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When a credit check is conducted for a mortgage inquiry, the national credit bureaus (namely Experian, Equifax, and TransUnion) have the ability to sell contact and personal information to unsolicited lenders. This process occurs without the consumer’s awareness.
The information provided includes names, contact details, and a substantial amount of personal data linked to individuals who have recently submitted mortgage applications. As a result, individuals might find themselves being contacted by rival companies that have obtained these “trigger leads.” This situation often leads to confusion among borrowers and might even coerce them into disclosing personal information that they hadn’t originally intended to share with other lenders.
Often they represent themselves as someone the borrower is familiar with and quote outrageously low interest rates along with extremely high fees, or resorting to deceptive tactics or sudden changes in the terms.
Our mortgage process includes steps to prevent this from happening to our clients. We get ahead of this and provide steps to stop it from happening. If you want to stop this on your personal credit visit optoutprescreen.com.
I recently went through this credit-check process and took careful note of my encounter. To gain insight into what I learned, watch this video. I must admit, the revelations were rather astounding!
My Team and I are always available to answer any questions or assist in any way, so feel free to reach out!
Senior Loan Officer| NMLS #621637
Combining over three decades of industry knowledge, The Johnston Team is thoroughly dedicated to matching each borrower to the perfect loan program.
Team leader Stephanie Johnston began her mortgage career shortly after graduating from The University of North Texas. Utilizing an approach that combines both creative and analytical problem solving Stephanie has built a reputation for offering honest, detail-oriented guidance for her clients. As part of Service First Stephanie has a place to build her team in an environment dedicated to putting borrowers first.
Whether you’re purchasing your fifth home or your first The Johnston Team has the knowledge and experience to find the loan that’s right for you.
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