While it is similar to buying your first home, there are many factors that change when you’re looking for your second and newest place to live. Just make sure you’re prepared, and you’ll be on your way to buying a new place to call “home!”
You’ve done it – you’re in the process of selling your first place and are looking for somewhere new to call “home.” First, congratulations! Next, it’s time to think through what exactly you want out of your second property. Are you looking for a complete change or something a bit bigger? While similar to buying your first home, there are some additional considerations to keep in mind the second time around. We’ve broken down some of the most important factors to consider before you take that first step in buying your second home.
1. Evaluate your home situation. Before you start looking at a second home, it helps to be sure of what you want out of this new residence. Will this home be for just you and your hubby since the children have moved out? Or will this new property need to house even more people with an expanding family? Before you start looking at homes, it’s integral to know what you want in advance, as the size of a home can play a massive role in where you purchase.
2. Find the right location. Location can be one of the most exciting factors when you’re in the market for a second home. Where you chose to buy depends on your personal desires and goals. If you previously lived in a cold environment, a home on the sunny coast may be the perfect change for you and your family. For people who lived out in the country, maybe it’s a new condo within the city limits for proximity to entertainment, shopping and more. Whatever it is, make sure you consider your long-term goals.
3. Don’t impulse buy. It seems obvious, but a second home isn’t the same type of purchase as say, a new purse or a set of golf clubs. Even though you have one home purchase under your belt, that doesn’t mean that you’re an expert. Spend the same amount of time and thought that you put into buying your first home on your second. While the process may be easier as you understand the steps, it’s still a major purchase and should be treated as such.
4. Dig into your financials more. Yes, you understand the mortgage process a bit more now, but there are other hurdles to jump when transitioning from one mortgage to another. Rely on professionals to make these financial transitions as smooth as possible and to protect your investment. In addition, dust up on what a new mortgage entails. Pre-approval standards change frequently and can be different since the last time you purchased a home.
5. Calculate a budget and stick to it. As you already have previous knowledge of the homebuying process, you know how much finances play into what type of home you can purchase. Think through what you budgeted for on your first home and how much it actually cost – there’s probably a big difference, right? Plan ahead and save up even more to make sure your second home is the one of your dreams. If you need some help, you can use our mortgage calculator for a rough estimate of what your payments could look like.