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And then didn't move for 6 months? I'm a teacher. I'm relocating from Fayetteville to RIchmond VA this summer. I don't yet have a job but there is no reason I won't get hired, I'm 100% confident there will be a position for me. There are current vacancies in my area of certification. I'm moving to be closer to my elderly mother and other family.
I Own my current home in full...it is worth about $175K. RIght now I save appx one third of my monthly income, about $1000 a month and I have $9,000 in my checking account. I've found a home I want to buy in RIchmond for $235K so of course I will have to go back to having a mortgage, but I can live with that. I have 40K in a brokerage account I can use to put a down payment on the new home and move in gradually with my major move being in June when school gets out.
So I would own two houses for about 4 months. I realize this sounds crazy BUT IMHO the market will heat up to the point where a similar house will cost more in June. IS there any way to predict how much more? How do I calculate that?
I'd really hate to let this house go...it checks literally all my boxes. I'm really tempted to drive up this weekend to see it. and maybe put an offer on it (I don't have a realtor in RIchmond yet)
See if you can preapproved for a mortgage this week. Monthly payment on $200k is roughly $1300 for a 30-year loan and that's before taxes/insurance. You may not qualify without a higher down payment, especially if you will be in between jobs.
Having the home in the new location will make the move much easier. It will also make the sale of your current home easier, because you can move lots of your stuff out to make your current home more show ready. Or, you move completely to the new location and then sell your home as a vacant home. This is easier than having to leave the home for each showing and trying to keep the home in top shape while living there. And it's so much less stressful to search for a home later in the new location. Nice to already have a home to move into, especially if it meets all your criteria. That much less to do later and you can focus on finding a job later as your top priority.
Potential negatives: You don't know for sure whether the real estate market will rise or fall by this summer but that is only a few months away. There are some indications of a falling market or a flat market. Make sure you have a plan in place that will cover you if real estate goes down.
I don't think falling real estate or flat real estate will impact selling your current home that much because it's only a few months away from when you will be putting that home on the market. And because it's a less espensive home it is more likely to sell fast.
Another possible issue is whether the mortgage company will give you a loan if they know you plan to quit your current job but don't have a new job already lined up. You might have to talk to a mortgage broker about this to determine the best way to go about getting a loan for the new place. Perhaps talk to a mortgage broker this week before you make an offer and tell them your situation. They might have suggestions for how to proceed with getting a loan.
Summary: I would do it. Will make things a lot easier for you and the risks are fairly minimal even if a falling market because the actual move is this summer...which means you can put the existing home on the market is perhaps 3 months.
You also don't have to make your offer contingent on the sale of your existing house; you have a (nearly) free place to live right up till the moving vans arrive; you can arrange any work on the new house while living in the old one, not feeling that you need to hurry up and get moved in because apartment or hotel rental is eating money every day.
To play devil's advocate I can see a number of reasons why NOT to buy the home before moving.
1) The market may not heat up. Interest rates are higher now than they were in previous years which is suppressing demand.
2) There is a very good chance we are headed into a recession and housing prices may actually decline by June. There is no guarantee but it is likely.
3) If you buy this particular house what happens if your new job is a long commute from the house location?
4) The house may be attractive to you but what about the location? It is commonly recommended a person should move to an area and rent until they get the lay of the land.
To play devil's advocate I can see a number of reasons why NOT to buy the home before moving.
1) The market may not heat up. Interest rates are higher now than they were in previous years which is suppressing demand.
2) There is a very good chance we are headed into a recession and housing prices may actually decline by June. There is no guarantee but it is likely.
3) If you buy this particular house what happens if your new job is a long commute from the house location?
4) The house may be attractive to you but what about the location? It is commonly recommended a person should move to an area and rent until they get the lay of the land.
Just some things to consider.
Thanks for playing Devil's advocate!
RE: Renting first....I'm just not willing to move twice! I am familiar with the area so This does not seem as important to me.
Do you know if the house is located in a good place compared to your future job as far as commute time?
Is this house so special that it needs to be bought right now?
To me it seems premature unless the house is absolutely perfect, near relatives, near work.
Your mortgage rate may be a little higher if it is considered a 'second home'.
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