Dear David,
My partner and I are retired and have lived in our home for over 20 years. We’ve been talking about downsizing to a condo but aren’t ready to move just yet. When we’re ready, how do we align the timelines of selling our existing place and buying a new one, so our next home will be ready when we want it? – THINKING AHEAD
DEAR THINKING: It sounds like you’re juggling a lot of valid concerns about your next steps. When you have specific ideas about where you want to be but are unsure about the timeline, you’ll want to do a little digging to ensure each step unfolds according to your vision.
A major lifestyle change is often easier to get your head around when you know where you’re going. Even if you’re not ready to move today, I suggest getting out and taking stock of the options. You’ll want to get familiar with what’s available and what the cost might be. If you’ve lived in your home for decades, you may be out of touch with today’s market. If you happen to find something you like, you’ll have a clearer sense of how it fits into your timeline.
The freedom to get what you want, when you want it, will often come down to finances. Getting your financial ducks in a row right away will help you to keep your options open. If necessary, you may need to own two homes at once, at least for a couple of months. This might sound scary, but it really isn’t when orchestrated properly.
A reverse mortgage is one tool that might help you free up the equity to carry two properties. It offers less stringent qualifying criteria than other types of loans, and lets you borrow up to 55 percent of your home’s value. The entire loan with interest is repaid when you sell your house.
A home equity line of credit might be the option that helps you cover the cost of a condo before your current home is sold, as it allows you to borrow as much or as little money as you need (usually up to 65 percent of the value of your home). Be diligent about your payments, as the monthly minimum only covers the interest on what you’ve borrowed, and debt can add up, just like on a credit card.
While you may not be ready to move just yet, it’s never too early to start getting your house in order. Start with the basics like clearing out clutter and making any repairs that you may have been putting off. By doing this work in parallel with shopping for condo options, you can be ready to seize an opportunity if you happen to find what you want.
PRO TIP: The challenge with window shopping is that if you find something great, you won’t be able to buy it if you’re not financially ready. For this reason, I suggest you avoid shopping if you’re not also prepping your house for sale. This is where some coordination between your Realtor and your mortgage specialist comes in handy. There are a lot of moving parts, and with professional assistance, you can be ready to seize the right opportunity when it comes along. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.
