Are you currently in a home you have been in for a few years or more? Is your home getting to be too small for your life? Then you may want to look into your ability to move up in your purchase. Before you shut me off and say I can not afford it you may want to read more. Heck you may even realize you can not afford not to. On the graph you see below there are four scenarios.
- You have the current property at $465,000
- The 30 year refinance numbers for the same loan
- A $575,000 re-buy while using a bridge loan option
- The numbers after selling your $465,000 home and rolling the money into your $575,000 purchase.
First line as you will notice the payment is $1,773.78 with 26 years remaining. The ReFi brings the payment down to $1,352.86 which is $420.92 less a month. This second option seems to make the most sense right? Wait till you see options 3 and four. On option 3 instead of using a home sale contingency and hurting yourself in the market you make one balloon payment of the two homes, your $465k and your $575k move up home. The new payment there would only increase by $641.57 a month from your current home.
While home sale contingencies do work often not having one makes your purchase offer more powerful. If you chose to skip that step then jump right into column 4. Now if you sit with both homes for 2-4 months which is more than the current average it would cost you an additional $2,000-$4,000. I am sure for most people this is not a ton of money to put out to have the comfort of having the ability to move at your pace vs just take a house cause it came on the market and could work.
When we hit the last column this is when you will understand the re-buy vs refinance. After all is done with selling the other home and buying the new one your new payment would be $1,746.70 which is $27.08 less than you were paying for your $465k house. Can you imagine that! If this sounds like something you would like to hear more about please reach out to Movememtum Realty and we would be happy to help you buy and sell your home. Please make sure to check out our Podcast, Facebook Group, and Newsletter named Real Facts on Real Estate. If you have any questions or comments please leave them below.
All numbers were run by Chris Devin of Cross Country Mortgage NMLS#47305