For many people, one of the trickiest aspects of purchasing a home can be what I call "the dance"...I refer to "the dance" as the financial transition from your old house to your new house, especially when your finances are all tied up in equity in the old property. Today I’m going to discuss a few different steps you can take to transition from your old home to your new home.
My first recommendation is to sell your current home before purchasing a new one. This is the safest, most financially prudent way to go. As a big Dave Ramsey follower I strongly recommend this option. This way, you’ll know exactly how much money you have to work with from that sale, and from there you’ll have a price range within which you can work to find a property. You’ll have a clearer picture of your finances and will avoid paying any extra holding costs, too.
This recommendation can seem incredibly scary as there's always that fear of "what if we don't find a place to live in the meantime!?". What I’ll tell you though, is that it's EXTREMELY rare that we’re not successful in helping clients find a home that they’re more than thrilled about immediately after selling their old home. I can count on one hand the amount of times in the last 13 years that we've had a client unable to identify a great property to purchase and move into after selling their old house. Our "Love it or Leave It" guarantee is also an added benefit to Hauer Group V.I.P. Buyer Clients.
My recommendation is to sell your current home first.
I understand that not everybody has this level of risk-tolerance in transitioning from an old home to a new one so quickly; some would rather remain in a home that they've long outgrown over the thought of selling it and not already knowing where they're going to move to.
If you’re stuck in this spot and you have a good amount of equity built up in your home, you might consider the option of getting a Home Equity Line of Credit, or HELOC, through Columbia Bank. They have a great promotion going on which will allow you to pull a line of credit from your current residence and only pay 1.49% interest on whatever amount of equity that you choose to use from your current house. It doesn't cost you any money to simply have the HELOC open and available to you, so by being proactive about it, you can be prepared knowing that those funds are readily available in case your dream home pops up on the market! You can use those funds for your down payment and then upon the sale of your home, you can pay off your heloc with proceeds from your home sale.
If you’d like to speak more specifically about your own options for transition loans like this, I'd encourage you to contact me or Allisha McVay at Columbia Bank by email at amcvay@columbiabank.com or by phone at 253-858-5105. When it comes to HELOC loans in particular, Allisha is the best, most knowledgeable gal around on the topic and Columbia Bank has some excellent options to work around your specific scenario. You can always give me a call or send me an email as well. I look forward to hearing from you.
