Many families hit a point where they realize their current home doesn’t meet their changing needs. Whether you need more space, want your kids in better schools or just want a nicer home, the process feels a lot more complicated when you’re already making mortgage payments on a house. This is especially true when you’re looking at new homes that can take up to a year to build.
Fortunately, there are several options available to those who want to move up. Take a look at your current situation to find ways to make a new home work for you.
Sterling’s List and Sell Program
If you currently have a Sterling home, you understand the quality of our work. We value your business. To help you get into a home that’s a better fit for your family, we offer the List and Sell program to all Sterling homeowners. When you choose to purchase another Sterling home, we’ll pay for your listing and selling commission costs – up to $20,000! This means you’ll have more money to put into your new home. It’s also just a bit less stress for you. Talk to one of our sales agents about this process.
A home equity line of credit allows you to access the equity you have in your current home without selling it first. It’s a smart move for those who want to remain in the current home while building a new home. The HELOC will give you the money you need for a down payment to get started, but you’ll still be responsible for two mortgage payments. Check out our mortgage calculator to get a quick estimate of how much the new payment will be. This will help you determine if it’s an affordable option for you.
Porting Your Current Mortgage
If the terms of your current mortgage are holding you back, porting your mortgage might be an option. Many mortgages lock in the mortgage rate for a 5-year term, and companies discourage changes with penalties for breaking the term. However, some lenders will allow you to bring the old mortgage with you into the new one. If the new home is more than your current mortgage, the lender will “blend and extend” it.
This means that they’ll take your current mortgage at its existing rate, add the additional amount at the current rates, and calculate a single monthly payment at a blended interest rate. This is a very good option when the interest rate you’re paying is lower than the rates banks are currently offering. However, not all mortgages are portable. You’ll have to talk to your lender to see if this is an option for you.
Taking out an unsecured loan may also be an option to help you make the down payment on your new home. Since ULOCs tend to have higher interest rates, it works best in cases where you have a short-term cash flow problem. For instance, this could be a solution for someone who wants to build a new home, but doesn’t have enough equity in the current home to take out a HELOC. You’ll be able to start the new build process, live in your current home until the new home is ready, and then pay off the loan once you’re able to sell the current home.
Bridge loans help homeowners get the money they need from the sale of the home before they actually close on the home and get that check. It’s only an option if you’ve sold your home, so it’s best for those who are looking to move into a new home quickly after selling. Once you close on the home, you’ll have to repay the bridge loan using the money from the sale. Unless you have an alternative place to live while a new home is being built, you will not be able to use this option if you want to build a custom home. However, if you’re interested in one of Sterling’s quick possession homes, a bridge loan is a great way to make a smooth transition.
Don’t let your current living situation hold you back from getting into the home of your dreams. There are plenty of solutions for those who need to sell and buy a home at the same time, and our team can help you navigate the process. Talk to one of our preferred lenders to find out which type of financing options can work well for your personal situation.