How to Finance if You Own a Home and Are Moving to Another City

Job transfers, layoffs and retirement may be reasons why you are relocating to a new area. When you move you will need to find a new place to stay, and you may choose to purchase your home right away and keep the home you are leaving behind. If you have children you may want to settle right into a permanent neighborhood so they do not need to change schools more than once.

Instructions

Sell the Home and Finance

1

Put your current home on the market as soon as you learn about the transfer or the move. Find a realtor that will work with you and price the home as aggressively as you can afford.

2

Ask your employer if you qualify for relocation program. Some companies will buy your old home so you can purchase a new home right away. This program makes it easy to apply the equity from your old home to your new home.

3

Find a home you can rent in a good school district when you first move to the city. This home should be in a neighborhood you would be comfortable settling in, which can prevent you from needing to transfer your children again.

4

Apply for a new mortgage once you have sold your old home. Apply the equity from your old home to your new home to put down a sizable amount on your home. If you are moving from a more expensive area to a less expensive one, you may be able to purchase a nicer home or nearly pay your home off with the equity.

Financing While Keeping Your Other Home

5

Create a budget to determine if you can afford both homes. Allow enough to cover the change in the cost of living and to cover your current lifestyle. If you do not make enough you will likely need to sell your old home first.

6

Pay down your consumer debt, and clean up any credit mistakes you have on your credit report. If you are going to be managing two mortgages you will need a clean credit history for the bank to be willing to loan you the money.

7

Increase your income. Banks are not willing to lend money if you are going to owe more than around 35 percent of your monthly income to service debt. If your mortgages are both small you may be able to keep your old home as well.

8

Rent out your old home to help you save money and cover the other mortgage. Budget to cover both payments or put extra money into savings to cover the mortgage payments in the event your renters miss a payment or you are between renters.

9

Obtain approval for a mortgage before you go house hunting, so you know how much the bank will approve for you. The bank may lend you more than you can really afford, and you should determine how much you can truly afford.