See Your Banker Before You Shop

Time for a move? Does the market softness for more expensive homes, the high appeal and demand for your more average home, and historic low interest rates make it financially feasible?

You may think so, but will your banker? Make an appointment before you shop!

Your timing could not be better as to the cost of your mortgage loan. Interest rates are still at historic lows. The interest rate of your loan can affect your cost of home ownership far more than the price you pay for a property. The take-away these days is to corral as much cheap mortgage money as your comfort level and overall financial picture permits.

If you want to move, now is when you need to see your mortgage banker. Moving up is not as easy as it used to be. The bank is going to want to know what you are doing with your present home. You might not want to sell it and have to move out not knowing where you are going to live next. And no seller will pay attention to you if you make an offer asking the seller to wait for your home to sell. So if you are keeping your home, the lender is going to look at how much equity you have in it. And, they will want you to qualify for that payment, as well as the payment on your next home. And, the lender may want you to make a large down payment on that next home. And, after all that cash commitment, the lender may still want to look at how much money you have left in reserve, such as in retirement accounts and other savings and investments.

So see your banker now. You must have that financial plan in place before you shop. You won’t have the luxury of figuring out how you are going to pay for that next home when the opportunity presents itself.