The exchange of a house can have a great advantage, since with the sale you will already have the capital to make a down payment. Find out more.
Currently, the real estate market is going through a boom phase, even causing problems for many families. In this situation, you are likely to be attracted to sell your home in order to buy a bigger house.
Analyze your financial life
First of all, you should start by doing a financial life analysis, i.e., understand how much room you have in your budget for the new installment, analyze the equity available to finance the taxes, the down payment and the process costs, among many other factors.
By performing this analysis, you will ensure that you make the best decision. It may even be that you don’t need to sell your current house, putting the house up for rent and thus obtaining an extra income.
Financing the new acquisition
In case you choose to change your house, you have some challenges ahead:
- Selling your current house, a process that takes some time and may bring with it some dangers, namely rushing into the sale and consequently reducing the price;
- Choosing the best financing solution for the new purchase.
The house exchange can have a great advantage, since with the sale you will already have the capital to make a down payment.
In this sense, you also have a good negotiating position with the bank, since you have a better relation between the loan amount and the guarantee. Once again, you will need to sell your house before buying your new home.
What if you can’t sell your current house?
To make the whole process easier and to be able to sell your house with complete peace of mind, there are certain home exchange products with some banks. These solutions have certain characteristics.
- Two properties are given as a guarantee, which benefits the relationship between the loan and the guarantee, and you can even see the total amount of capital you need for the new house financed;
- During some years you can have a grace period in the payment of capital on the credit of the house you are going to sell. This way, your effort rate is not so affected with the existence of two home loans.
- This solution also allows you to evaluate the advantage of having your first house rented;
- If you have two mortgages, however, you will incur increased costs.
- Home exchange products can be interesting financial products for the transition. They are not the best products for the long term, but they allow you to make the switch with peace of mind. In this period, you may pay a higher interest rate, but after the sale you can negotiate the credit conditions again, negotiating the spread and the associated insurances, namely the credit life insurance.