Despite the global pandemic, the housing market across Texas has been hot, but mostly for sellers. Housing inventory remains low and often homes are being sold within days of being listed, and are selling for over asking price. If you are considering selling a home, now may be the best time to do so. Finding a new house may be the trickier part of the equation, however, so some people are opting to turn their current home into their dream home by using the equity in their home for renovations or remodel. Here are some things to consider before listing your home or choosing to stay in your current home and update it.
Option #1: Selling Your Current Home to Buy A New House
Interest rates on mortgages continue to be some of the lowest ever seen in our history. These low rates can mean that your monthly payments could be lower and that you may be able to afford more house than in the past. But don’t forget to consider additional costs that may be incurred as well.
House inventory is critically low and often homes listed sell very quickly after receiving multiple offers. This low inventory leads to very high competition between potential buyers. Bidding wars are not uncommon at this time and homes can sell for thousands of dollars over asking price. If you’re thinking about selling your home, it might be a good idea to find your next place to live prior to listing your current house as things are moving very fast in this market. We can help out during this time to make your offer stand out on your new home.
Home values have been increasing tremendously in the last few years, which means that property taxes are also increasing. Before you buy, make sure you are aware of local property tax rates and how those may affect your monthly payments. You may be able to get a good deal on a home only to end up paying a significant amount in taxes. Research is key to avoid any unexpected costs. Your loan specialist can help you estimate potential payments based on tax rates to make sure you stay within your overall budget.
Because many homes are being sold at over asking price, it means that they are also being sold over the amount appraised. Often lenders will only finance up to the lower appraised value, so if you’ve decided to offer above that amount, the difference will be added to your downpayment amount. Do you have enough in savings to cover that additional amount? If you’ve considered these issues and are financially set to buy, with the low interest rates available, it may be the best time to buy. If you aren’t sure about the amount that the home may appraise for we can assist with this as well.
Option #2: Remodeling Your Current Home
Once you’ve considered the cost and effort needed to buy a home in today’s market, you may find that remodeling your current home may be a better financial option. Before diving into DIY projects or hiring a contractor, here are some things to take into consideration:
Because home values are increasing, you may have more equity in your home than you previously thought. Your accessible equity is found by adding the current balance of all the loans on your home, such as mortgage and second mortgage and subtracting from 80% of the estimated value of your home. For example if you owe $220,000 on your home and it appraised for $600,000 you could have $260,000 in equity. That equity could go a long way into making improvements on your current home. We make taking money out of your home as easy as possible and can often do so in a short amount of time.
If you’ve created a list of must-haves for a new home, consider making them a reality in your current home. Perhaps it’s better to upgrade your kitchen or bathroom rather than investing the time and money into moving. Are there simple upgrades that you can invest in to make the most of your current home?
Option #3: Refinancing Your Current Home
Perhaps you’ve decided that staying in your current home is your best bet, but you want a better rate to free up cash for home improvements. Refinancing may be a good option for you. Ask us about a Cash Out Refinance!
No matter which route you’re considering, we suggest contacting our lending team. Our loan specialists can help you determine which option is best for your specific situation and will help create a plan based on your needs. As always, our team is available to assist you through the home loan process
. Contact us today at 512.435.4444
Click one of the buttons below to get started!
*APR = Annual Percentage Rate. Membership/Regular Savings account required. Limited time offer. United Heritage policies, terms, conditions and restrictions apply. Existing United Heritage loans not eligible. Rates and fees subject to change without notice. APR is subject to underwriting approval and may increase depending on borrower qualification, applicable finance charges or repayment term. Cash out is a 50(a)(6) first lien only. Closing costs apply. Equal Housing Opportunity. NMLS #630601