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I'M Onyi Silmon

My purpose as a luxury real estate agent is to help you build a legacy which speaks to who are you.

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You're Moving On Up: 5 Things You Need To Know

Published January 30th, 2019 by The Silmon Group


You want to move up, even though you love your home. Or perhaps you hate it. The feeling to seek greener pastures seems the next logical step. Maybe the kids are getting older and your living quarters seem like they are closing in on you. Perhaps you have a new baby and now the home that was perfect for just you and your spouse seems too small.

Regardless of the reason, buying a new home when you already own one is a big commitment. The need to move is not the only factor to consider. Here are some other things to think about before you “move up”.

What Will the Move Mean For Your Pocketbook?

Moving to a larger home means a larger mortgage. Given the current rate environment, this will inevitably mean higher payments than you’re used to. How can you mitigate this? By taking a look at all the mortgage options available to you.  

Many buyers choose 30-year fixed mortgages. This is understandable, given this option’s conservative characteristics. Buyers can live in their home without worrying about rate changes as they pay off their home. On the other hand, if you don’t think your new place will be your “forever” home, you could save money by looking into an adjustable rate mortgage.

The introductory rates for adjustable rate mortgages can be anywhere from ¼ -1 percent lower than a 30-year fixed mortgages. The savings if you are considering a jumbo loan are even more significant. If you move out of your home before rates rise, you can benefit from lower mortgage payments without the fear that they will increase.

Most 30-year fixed mortgage holders do not live in their home for 30 years. You would definitely be at a huge advantage by looking into this! There are adjustable rate mortgages with introductory periods as long as 10 to even 15 years! This is a niche product, so it pays to shop around.

Furthermore, if you combine these lower rates with the equity from your previous home and pay down more than 20 percent on your new home, you can enjoy savings which will mitigate the higher rates we’re seeing right now.

Another key consideration is your expenses, since a larger home means higher property taxes and utility bills. Take the time to speak with your financial advisor and come up with a solid budget. By scrutinizing every dollar you spend, you can cut out the nonessentials to maximize your savings.

What the Credit Man Says

Credit plagues all of us. If your credit is not in order, don’t consider moving until it is. Good credit will ensure you’ll get the best rates to finance your new home. Rising mortgages rates make good credit even more imperative.

Take the time to order your credit reports from the three major reporting agencies. By law, you are entitled to one free credit report every year from AnnualCreditReport.com. Mistakes are common on credit reports, so check yours out at least once a year, whether you’re buying a home or not.

What Your Lender Sees

While good credit goes a long way, it’s not the only determining factor when it comes to qualifying for a loan. Loan officers will also look into your DTI, or debt to income ratio. This is essentially the percentage of your gross income that goes to paying off debt.

DTI is normally calculated by adding all your monthly debt and dividing it by your gross monthly income, then multiplying this number by 100 to come up with a percentage. This percentage should not exceed a certain number, according to how stringent your particular loan institution’s loan parameters are. A good rule of thumb is that your DTI should not exceed 43%.

If your DTI is higher than that, you’re left with two options: increase your monthly gross income, or pay down your current debt. If you want to get an exact number for your DTI, this online DTI calculator from Wells Fargo is a good one.

Sale Of Your Current Home

How much you owe on your current home will influence your ability to afford another home. If you have not paid off your home, this debt will be factored into your loan application.

That said, the sale of your home could leave you with a hefty sum to cover your closing costs, down payment, and other moving expenses.

Another thing to consider is how much you believe your home will sell for in the current market. Have you done everything necessary to prepare your home for the market?

Need help with this? Then visit this page.

Learn the tricks to have buyers vying to buy your home NOW!

Preparation and pricing are huge determinants of how much money you will end up with when you sell your home. Looking into this now enables you to figure how much you will need to make moving worth your while.

Do You Really Need The Extra Space?

Is it really necessary for you to move to live comfortably? This is an important question to ask yourself. If the uncomfortable situation you find yourself in is only temporary, would you be better served by just toughing it out instead of taking on another mortgage?

I suggest putting this thought process to paper and making a list of the pros and cons of moving. By doing this, you are removing emotions that may not serve you well as you make this very important decision.

I’d love to hear from you. How is moving up making you feel? Let’s explore this together.



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