What to Do If You Are Stuck in a Starter Home

Buying a house can give you a feeling of permanence, but what if moving into your forever home does not really mean forever.  The concept of a starter home exists for a reason.  Many homebuyers, especially young, newlywed couples, who can afford to qualify for a mortgage at all can only qualify for a one-bedroom condo, not the kind of place that can eventually accommodate a multi-generational household, even if being the anchor for a multi-generational family is their eventual goal.  One’s plan to buy a house now and then sell it for X amount of money X years in the future is harder to achieve than it seems, though.  You cannot control how the housing market will be in a few years; if you could, the housing market would not have ended up the way it is now.  If you own a home but would like to buy a bigger one to accommodate your growing family, but you worry that you are not in a financial position to do so, contact a Bronx real estate attorney.

Renovate to Increase Your Chances of Selling Your Starter Home or Renting It Out

To qualify for a mortgage to buy a new house, your strategy might be to sell your current home, enabling you to place a down payment on your next property.  This is easier said than done, though, because it requires someone to be able to buy your starter home, and real estate prices have been notoriously unaffordable.  There may be hope on the horizon, though, since mortgage interest rates are starting to get lower.

Your other strategy might be to rent out your starter home and use the profits to contribute to the mortgage installments for your new house.  Mortgage lenders will let you list 75 percent of the rent you collect from your tenants on your new mortgage application, assuming that you will need to use the other 25 percent to maintain the property.

By renovating your property before you sell it or rent it, you can increase the amount you get for a sale if you sell it and collect in rent if you rent it out.  You can pay for the renovations with a home equity loan, cash out refinance, or personal loan.

Count Your Blessings

The least expensive option, of course, is just to stay in your starter home.  A family of three can live in a one-bedroom condo; plenty of families are doing this as we speak.  Every month, the amount that you owe on your mortgage gets lower, and qualifying for a refinance on your existing mortgage, which could further lower your monthly payments, is more affordable than qualifying for a whole new mortgage.

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you plan to sell or rent out your starter home.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.

Source:

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