Buy Or Sell First?
Dian Hymer on October 20, 2008 posted on Inman News an article “Pros and cons of carrying two homes in today’s market”
Plan for the worst and hope for the best. This is a reasonable course of action if you’re planning to sell your current home and buy another one in the current market.
There are good reasons to do so for some homeowners whose homes no longer work for them. Interest rates are lower than they were a year ago (hovering around 6 percent at the beginning of September 2008) and home prices have dropped in many places. In general, there are more homes to choose from. And, there’s less competition from other prospective home buyers. This gives buyers more opportunity to negotiate.
Current market condition is applicable to many home owners who are planning on selling their homes, and buying some other homes. They may be trading up or trading down, and if they do not plan to keep 2 mortgages, prudent home sellers should read Dian’s article.
Similarly, some home sellers may like to keep 2 mortgages and rent out one of the homes as a rental property for investment. Banks and mortgage lenders have their rules when dealing with home owners carrying 2 mortgages. If a home owner has substantial equity on his home, and the family income plus the rental income can adequately cover the mortgage payments for the 2 homes, financing a second home purchase may be approved.
