My wife and I are looking at upgrading to a nicer home and met with a realtor for the first time last night. I was planning on selling the old home first (or at the same time) as buying the new one and then taking some savings I had along with the old house money (old house is payed off and we are debt free) and buying the new home without need for a mortgage and messing with financing. However the realtor mentioned that it might be a good idea (better negotiating power and better chance of not losing a house we like if we can't find a buyer) to get pre-approved for a loan and buying the new home first (if need be) and then paying off the loan when we sold our old house.
We could make a 50-60% down payment on the new home and take out a loan for the rest and the payments and taxes would increase our expenses from currently $2800/month to around $3800/month and still leave us with 30k in emergency savings. Income after tax is $5000/month. Now that I'm typing this maybe a better idea would be to pay less down and keep more in emergency....if I do it.
I've always been real conservative with our money and I'm not so sure if this is a good idea or not plus I've never bought a home at the same time as selling so I'm not sure of all the dynamics involved there so please bear with me. We have an acquaintance who IS interested in our house (not through a realtor) but he's in his early 20's so its hard to know how serious he is. If I would do it I would like to get a low or no fee/points loan if possible, but I'm left wondering if a bank will even make a loan if you are just going to pay them back so soon, especially if it is no fee/points.
Am I even thinking correctly to even be considering this? I say this because my parents shocked us all and got separated a few weeks ago and there's been a lot of drama lately.
So do the benefits outweigh the risks and is it worth the hassle with the banks? What is your advice?
And by the way I would rather not be a landlord.
Any advice is appreciated. Thanks.