Deciding When You’re ‘Ready’ to Buy a New Home

By Lynn Cattafi, in All Communities

Lynn is In
“We found the perfect home…but we are just not ready yet.”
This is a very common reaction. Many people that are happily enjoying their new Schell Brothers home today had this exact reaction when they realized they had found the floor plan and community of their dreams and that it could all be possible. Not all of these ecstatic homeowners were “ready” when the opportunity presented itself. How did they do it? How did they overcome the obstacles to make their dream a reality now?
I can speak personally to this dilemma, because I am writing this blog from the dining area of my gorgeous Schell Brothers Mayberry! I had many obstacles to overcome which felt daunting, and I am in the business so I know how you feel! I had a home to sell and I was concerned to take on additional debt before we had our home sold, I had to purge boxes and boxes of family stuff that was no longer serving me, I had to pull together funds for a down payment, plan for additional funds or a higher loan in case my home didn’t sell in time, and many other things. But, knowing what I do about the ways to make this happen with ease gave me the courage to jump in…and I am SO VERY glad I did!! So, allow me to help you….
The best way to go about this is to list out what your personal obstacles might be and look at them one by one. Which ones are temporary obstacles, meaning that once your home is sold, for example, that everything falls into place? Let me get you started…what applies to you?

  • I have a home to sell (or more than one)
  • I am not retiring for a few years yet
  • I am retiring now and don’t know what my income will be yet
  • I have a lot of debt to pay off first
  • I have no liquid cash
  • I don’t want more than one mortgage
  • I only want a small mortgage and that can’t happen until I sell my current home
  • The home we fell in love with is more than we wanted to spend
  • We need to think about this for awhile

Now, let me take each one of these and give you a few options to consider. Many times, all you need is a temporary fix, something that will carry you through the couple of months of transition, until your home is sold, or your pension starts, etc.

  • I have a home to sell (or more than one): This is a common one. While the new home will be your new primary residence, as long as you can qualify to do it as a vacation (second) home in case your home did not sell first, you are good! There is no difference in interest rate between a primary and a secondary home. We would qualify you for the “plan B”, which is a larger mortgage, temporarily, in case your home does not sell first.
  • I am not retiring for a few yearsMany people are in this position. Weigh the benefits of having your retirement home purchased, set up, and available for your enjoyment now, giving you the ease of simply walking in the door at the time of retirement. The lessening of stresses at the time of retirement is a huge benefit in itself. This is usually an emotional time for people, as it is a big change. Too many people try and do everything at that time (retire, find a new home, clean out the old house, move…UGH!) Pace yourself, and get your new residence ready now (and start cleaning out your current home, little by little, now also! You will thank me for this little tidbit!)
  • I am retiring now and don’t know what my income will be yet: This is an easier one that you think, and this can also be a good fix for any income issues, as long as you are 59.5 yrs old or older. You can set up a temporary monthly distribution from your retirement assets (IRA, etc) that lenders will recognize as income. It can be something that you only set up if you need it to qualify, and it does not need to be set up until 2 months prior to the new home settlement. It can be stopped after closing if you wish. This is something that we use as a “plan B” for many Schell buyers.
  • I have a lot of debt to pay off first:As long as you qualify without paying off debt now, this is something you can plan for from the proceeds of your home sale, or at a date that is most convenient for you. If you have the cash and want to pay off debt now, it will help alleviate any concerns you have about monthly expenses
  • I have no liquid cashPerhaps you can obtain a home equity line of credit on your current home. This is what I did in my situation. This way, you have cash available to you that does not require a monthly payment unless you use the line, and the line will be paid off upon the sale of that property. Or think about a loan against your retirement accounts, or a small liquidation for down payment, or a temporary loan from a family member.
  • I don’t want more than one mortgage at a timeNot many people do! LOL! But, if most homes are selling within 60 – 120 days of being put on the market and your new Schell home will not be ready for 120-180 days, or longer if you are in a later phase, the chances of having to carry more than one mortgage temporarily are amazingly small. And even then, it would be temporary.
  • I only want a small mortgage and that can’t happen until I sell my current home: If you go back to the answer in obstacle #1, let’s see if you can qualify for a larger loan temporarily. We can set up loan options that allow a larger loan to be reduced after closing, along with the payment, with no need to refinance. Ask me about a recast.
  • The home we fell in love with is more than we wanted to spend: I know…I had the same obstacle myself. I could have purchased a cheaper, used home and would have spent a lot more money making it the way I wanted it, along with the aggravation that goes with that. Or, I could have contracted with a different builder for a cheaper home, but the quality would not have been the same, and I would not be as happy as I am today. I got the home I wanted, and my monthly costs are a small fraction of what they were in my last home.
  • We need to think about this for awhile: I would suggest before you start thinking about it, call my team and let’s talk out your personal options. Once you know what can be possible for you, you can make the best decisions. Many people sit and think about the things that scare them and all the obstacles to making their dream a reality, without ever really knowing the possibilities.

Call or email me, and let’s put your obstacles into the proper perspective! Remember what they used to say on Extreme Home Makeover…let’s move that bus!!

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