Wealth prospers wealth. How much truth there is in the saying can be understood by the ways people can utilize their home equity to enhance the value of homes. If it is sounding a bit difficult to comprehend, then here is the simple way of explaining it. Suppose you have a home that can be sold and you can move to a new home that is more expensive. This would be greatly increasing your home equity.
Since trading in assets pay off well, you will have to sell out you existing home and use the equity to buy the new home. If there is any gap between the values, it can be bridged by availing Florida home loans that have been designed to help you in such pursuits. The options that you have are – sell out the existing house first, you can ask the buyer to assume the mortgage and lastly you can acquire a new house before selling it. How you can exercise the options has been discussed in this article.
Selling the House First
This could sound a bit adventuristic as you do not know where you would be heading after the house is sold. So, fix up a rented place as interim accommodation till the time you can find a new house and then set out to sell the one you have. Get your property listed through real estate agents and put a price for it. Simultaneously start looking for your new house at the places of your choice. Since buying a new house is a lengthy process as compared to renting, be prepared to move to your rented accommodation as soon as you have sold the house. If you have been able to identify a new house, get it pre-qualified for Florida home loans so that you save time in acquiring it.
Buyer Assuming the Mortgage
Usually the mortgage charged to home loans is assumable. This means that at the time of selling your house you can make the buyer agree to assume the mortgage and continue with it, while you can be paid for the full value of the property. This gives more leverage in financing your new house as you have more cash available with you. Of course, the mortgage assumption will have to be approved by your lender who will make arrangements for transferring the mortgage in the name of the new buyer.
Buy the New House First
In this scenario, your creditworthiness has to be quite impressive as you have to pay for the mortgage of the existing house till the time it is sold and also pay for the new loan that will be mortgaged too. Go through the laid down process of securing Florida home loans after convincing the lender that you are financially strong enough to carry the loads of two mortgages simultaneously and buy your new house. Now you can think of either renting out your existing house or put it up for sale and start looking for tenants or buyers using the services of real estate agents.