By Carl Brecht
Welcome to Edmonds Real Estate News. Each week we will cover a topic of importance to either buyers or sellers of real estate. Please make comments and suggest topics for discussion.
Our third article focuses on the maybe not so obvious when considering the sale of your home. The obvious to everyone is to find the price at which your home will sell, and subtract the mortgage amount and closing costs. The remaining balance can be used in part or whole as a down payment on your next home. There is a problem though, what about the step that should be taken before you even put your home on the market.
Today, even though you have purchased homes in the past, lending requirement have changed. It is possible that you may not be able to qualify by today’s lending standards to buy your next home. Worst-case scenario would be that you sell your home and then find yourself on the street, without a home, wondering what happened.
Here’s another situation I have seen: Your home is sold, you find the perfect home, it is a day before closing on your new home, and you just went out a couple of days ago and purchased that new convertible, “the XK, that combines Jaguar’s legendary performance with advanced technologies and sporting luxury to create a grand tourer with the heart and soul of a sports car.”
The mortgage company just checked your credit report one last time before closing, and they find you just made a $100,000 purchase — and your asset-to-debt ratio has just changed. You get a phone call from your loan officer, and he informs you that there will be no closing on your new home tomorrow.
I thought you might want to hear directly from one of those lending people. The following is contributed by Rob Hallum:
When you are considering the idea of selling a home, depending on what you plan to do next, it might be a good idea to meet with a mortgage advisor to discuss your next move. The landscape of the mortgage approval process has undergone a vast amount of changes in the recent years so making sure you will be able to be approved to buy that next home is going to be crucial before you put your current home up for sale. For many years, if you had a sizeable down payment and moderate credit you were pretty much a shoe-in for approval for a mortgage. These days, although a large down payment will certainly be helpful, it will not guarantee approval for a mortgage. Even if you have been through the home buying and selling process numerous times over the years, it is important in these times of much more stringent guidelines to make sure you have a solid understanding of your financing options. Start by planning ahead so you will have the best chance for a positive outcome and a pleasant real estate experience. To schedule a meeting to discuss your options or if you have any questions, feel free to call Rob Hallum with Mortgage Advisory Group at 425-212-2682. Rob Hallum MLO# 71813; Mortgage Advisory Group CL# 36130; Equal Housing Lender; www.magloans.com/RobHallum
Next week: When selling, how do I show my home in the best light?
Carl Brecht has been licensed to sell real estate since 1977 and currently works at Coldwell Banker Bain in Edmonds. With a background in both residential and commercial sales, Carl has worked throughout the U.S. and in Germany, has owned his own brokerage and has spent two years in law school, studying property and contract law. He can be reached at [email protected] or at 425-368-8246.