Homeowners across the nation scrambled to refinance their homes as interest rates hit a historical low. While for many this was a long-term decision, for other the scramble to lock in the lower rate may have been a quick decision without giving thought to long term goals. Luckily, even if you just refinanced your home, you could indeed choose to purchase a new home should you wish to do so. As with all things there are pros and cons to the decision to purchase a new home post refinancing.
The main reason many people feel you shouldn’t purchase a home soon after completing a refinance is simply because of the cost associated with closing the loan. Contrary to what some people believe, refinancing your home isn’t free, while you don’t normally pay any out-of-pocket fees (the exception being an appraisal in some cases) the fees associated with the transaction are rolled into your new loan, and thus, end up being paid for each month with your regular mortgage payment.
Should you choose to purchase a home shortly after you’ve refinanced, the money you spent in order to close the new loan would essentially be a waste. However, this doesn’t mean that purchasing a new home is always a bad move. The market is ever changing and so if it is in your best interest to eat the cost of the refinance and move forward with the purchase of a new home, go for it!
In some cases, your mortgage lender may have an owner-occupancy clause. This clause can make it to where you are unable to purchase a new home for 6-12 months after the refinance has closed. While not all loans have this clause written in, it is important to make sure to read over all of your loan documents closely so that you understand all of the fine print associated with the refinance including if there is an owner-occupancy clause written in that could affect your ability to purchase a home in the near future.
Whether you choose to stay in your home for the long haul, or you are exploring your options to purchase a new home, working with a trusted agent and a reputable lender will ensure that your buying, selling and refinancing needs can all be met.
If you’re currently searching for a new home, are ready to sell your property and are in need of a qualified seller’s agent, or if you have any questions regarding New York Real Estate, please feel free to contact our office at any time.