How to use our Current Market to Reach your Goals!

Home values have been increasing for 93 consecutive months, according to the National Association of Realtors. If you’re a homeowner, particularly one looking to downsize your living space, that’s great news, as you’ve likely built significant equity in your home. Here in Bakersfield, CA, the Average Sales price has increased 5-6% in the last year so your Home Value has changed! We'd love to provide you with your Current Bakersfield Home Value! Click Here to request your Value. Here’s some more good news: mortgage rates are expected to remain low throughout 2020 at an average of 3.8% for a 30-year fixed-rate loan. You can get the Most Accurate Home Loan Interest Rates here in Bakersfield, CA Can be found HERE

The combination of leveraging your growing equity and capitalizing on low rates could make a big difference in your housing plans this year.

How to Use Your Home Equity // Q. "Can we Sell our house, keep some of the money and put some down on the next house?" A. Yes, you most definitely can! 

For move-up buyers, the typical pattern for building financial stability and wealth through homeownership works this way: you buy a house and gain equity over several years of mortgage payments and price appreciation. You then take that equity from the sale of your house to make a down payment on your next home and repeat the process. As stated above, you don't have to put the whole amount down. Say you want to use a bit of it pay off a balance on a vehicle or an open loan then put the remainder down on another home, you can do that. It is totally up to you what you do with your money. We always suggest you run the number with your Home Loan Professional to get an idea of the New Home Loan Scenario when you go to purchase another home. 

For homeowners ready to downsize, home equity can work in a slightly different way. What you choose to do depends in part upon your goals. 

According to HousingWire.com, for some, the desire to downsize may be related to retirement plans or children aging out of the home. Others may be choosing to live in a smaller home to save money or simplify their lifestyle in a space that’s easier to clean and declutter. The reasons can vary greatly and by generation. 

Those who choose to put their equity toward a new home have the opportunity to make a substantial down payment or maybe even to buy their next home in cash. This is incredibly valuable if your goal is to have a minimal mortgage payment or none at all.

A local real estate professional can help you evaluate your equity and how to use it wisely. If you’re planning to downsize, keep in mind that home prices are anticipated to continue rising in 2020, which could influence your choices. 

We wanted to Add this: When you are already a homeowner and want to sell your home and buy another, you can do this at the same time. It is called a concurrent sale. We help a lot of families do just that! It is one of our specialties and we'd love to show you how we can help you do the same. Click Here if you'd like to chat about selling and buying! 

The Impact of Low Mortgage Rates

Low mortgage rates can offset price hikes, so locking in while rates are low will be key. For many downsizing homeowners, a loan with a shorter term is ideal, so the balance can be reduced more quickly.

Interest rates on 10, 15, and 20-year loans are lower than the rates on a 30-year fixed-rate loan. If you’re downsizing your housing costs, you may prefer a shorter-term loan to pay off your home faster. This way, you can save thousands in interest payments over time.

Bottom Line

If you’re planning a transition into a smaller home, the twin trends of low mortgage rates and rising home equity can kickstart or boost your plans, especially if you’re anticipating retirement soon or just want to live in a smaller home that’s easier to maintain. Let’s get together today to explore your options.

More Blogs Below that you may find helpful. 

Make The Dream of Homeownership a Realty in 2020

Bakersfield Real Estate Market Forecast 2020

When is the Best Time to Buy a House

Gain Emotional Equity Through Owning Your Own Home

How much of my income is needed to Buy a Home in Bakersfield?

5 Top Home Buying and Selling Lies Your Told! 

How much money do I need to buy a house?

The Ultimate First Time Home Buyer's Guide to Buying a Home