Second time homebuyers know a thing or two about purchasing a home. But while the first time around was a learning experience, the second house hunting experience can bring about a new set of challenges. Second time homebuyers have to deal with juggling both selling their current home and searching for the right new home that fits their needs. Only homebuyers with enough confidence would be willing to risk carrying two mortgages for a period of time; however, in a sellers market in an area such as the GTA, you might consider it. But make your offer conditional on selling your home, if it’s possible.
Whether you buy first or sell first, it all depends on your needs and financial status. You’ll face the same costs as you did when you bought your first home: legal and agent’s fees, closing costs, home inspection costs, and moving expenses. However, the second time around you won’t be able to borrow from your RRSP for the down payment and you can’t expect a rebate for the land transfer tax paid. On the positive side, you may avoid buying mortgage insurance by using your equity to put down the 20% required.
There are also expenses in preparing your home for sale. Discuss the condition of your property with your real estate agent. In today’s market, you may decide to sell your home ‘as is,’ but in most areas, you might want to make upgrades to your property to make it shine. Before you make the decision to list and/or start looking for a new home, make sure you chat with your bank. Ask questions such as, can you get a bridge loan to buy a new property before you sell? And can you take your mortgage with you? You may find it’s possible to ‘port’ your mortgage to your new property, but you’ll only want to do so if the current rate and the time left on the mortgage is in your favour.
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road,
Oakville, ON L6K 3S4