You might have buildup your equity if you have been in your house for a some time. If this is the case, you might be in an excellent position to think start searching for homes for sale in Fort Lauderdale and buy another property.
However, let us first know what equity is and how it can help.
For those who don’t know, your home value minus the debt you have is the equity in your house. For instance, if your house is worth $500,000 and you are obligated to pay $300,000, your equity is $200,000. You can to utilize 80% of your equity as a deposit towards another property if you are eligible for a second house loan. With this, you won’t need to save for another deposit.
However, before you hire a mortgage broker for your second home, here are a couple of things to consider:
Can You Afford to Buy Another House?
You need a deposit whenever you buy your first home. You might be able to use your equity if you buy a second house. With this, you won’t have to save for another deposit.
However, it is vital to keep in mind that if you associate both securities to a similar loan, it will mean that both houses are at risk. This is especially true if you default on the mortgage.
You should also remember to include buying expenses, such as conveyancing and stamp duty. Also, you’ve got to guarantee you’ve got a comfortable buffer zone. You’ve got to be able to afford both mortgages if you run into unexpected maintenance expenses or if your second house is unrented for any period.
Plan and Research
A wise person always comes up with a plan. An excellent plan will require thorough research. You should think about rental returns as these tend to change and fluctuate. Thus, you should consult to your trusted realtor or mortgage broker regarding the rental rates in your location and the demand for rental properties if you have been a homeowner for quite some time.
Also, it is ideal to consider the fall and rise in property rates. If there’s a drop, it can be the time to capitalize on lower rates.
Understand Why You Want to Buy a Second House
You have to ensure you understand why you want to purchase a second house before you make an offer on it.
You should think about every single hidden expense and long-term costs linked with owning another property if you’re buying one as an investment. You have to know more about rental returns. You can also think about moving into your second house and renting out your first home.
You’ve got to ensure you have the money to support the decision if you are buying a holiday home. You should discuss it with your tax accountant to know more about your choices for renting out the property as a holiday rental.
Having an obvious knowledge of your goals will help direct options. This includes the type of property you’re searching for, how much to spend, and where to purchase.