Escape Low Rates: Transform Your Real Estate Future

By Dana Monson

My team and I are expert real estate agents with Keller Williams in Marysville, WA and serve the greater Puget Sound area, providing home-buyers and sellers with professional, responsive, and attentive real estate services since 2004. Want an agent who'll really listen to what you want in a home? Need an agent who knows how to effectively market your home so it sells? Give us a call! We are eager to help and would love to talk to you.

Many homeowners find themselves at a crossroads these days. Encumbered by historically low interest rates, the prospect of moving, downsizing, or simply changing locations can seem daunting. Yet, as we discussed with mortgage broker Kirstin Ward from Movement Mortgage, there are many solutions for those feeling trapped by their current circumstances.

Homeowners with substantial equity and low interest rates face a unique challenge. The desire to move is counterbalanced by concerns over higher interest rates and the financial implications of acquiring a new property. It’s a situation that calls for strategic planning and a deeper understanding of one’s long-term financial goals.

Kirstin emphasizes the importance of aligning real estate decisions with overarching financial objectives. Whether the aim is to expand one’s real estate portfolio or secure the lowest possible housing payment, these goals significantly influence the course of action.

One intriguing strategy involves retaining your current home as a rental property while purchasing another. This approach capitalizes on the low interest rate of the first home, potentially allowing it to cash flow immediately. The equity in both the new and departing homes serves to bolster one’s real estate portfolio.

For those considering this path, rental income from the departing residence can often be factored into the mortgage application for the new home. Lenders typically adjust this amount for a vacancy factor, but it can significantly aid in qualifying for the next purchase.

For homeowners wary of being landlords or concerned about navigating a competitive market, there are alternatives. Qualifying for a new home without the contingency of selling the current one offers flexibility and strength in negotiations. Additionally, the concept of mortgage recasting allows homeowners to apply equity from the sale of their initial home to the new mortgage, potentially lowering payments without the cost of refinancing.

Bridge loans emerge as another solution, leveraging the equity in the departing residence to facilitate the purchase of a new home. This financial instrument creates a “bridge” between the sale and purchase, offering a pathway for those without immediate cash resources.

The real estate market, with its myriad of financing options and strategies, doesn’t have to be a maze. Whether you’re exploring becoming a landlord, making a non-contingent purchase, or considering a bridge loan, the key is to consult with mortgage professionals like Kirstin. Tailoring the solution to fit your financial landscape and goals can transform the perceived shackles of low interest rates into stepping stones toward your next adventure.

If you find yourself pondering the possibilities beyond your current low-interest rate environment, it’s time to reach out to us by phone or email. Engaging with experts who can navigate these waters might just be the key to unlocking new horizons in your real estate journey.