Don’t Sell, Rent!
During the time it takes to close the loan on the new house, you can prepare the old house so it will be ready to rent. Typically, this usually involves some painting and minor repairs. Make sure that before you close on the new home, the "for rent" sign goes up on the old home and you have a list of potential renters. The object is not to pay for two loans at the same time without the additional income.
It's a simple 3 step process:
1.) refinance your residence.
2.) use the additional cash as a down payment to buy a new home.
3.) move into the new home and rent out the old home.
With today's "lower" loan rates, you should be able to get a fairly good rate on both loans. When shopping around for your refinance loan, you should keep in mind PMI (private mortgage insurance).
You can avoid this additional cost by keeping 20 percent of the value of the home in the home. Your mortgage payment will still be less even after using 20 percent as a down payment for the new home.
No Comments »
No comments yet.
