During the last year, home buyer demand increased because of record lower mortgage rates. However, due to these record-low mortgage rates, and also due to a fewer number of houses being available in the market for sale, home prices went up. The latter half of 2020 can be termed as a seller market but, the question on everyone’s mind is, will 2021 also be like that? If you are thinking about the right time to sell your home for cash, keep on reading.
Advantages Of Selling Your Home
1. Mortgage Rates Are Low
Lower mortgage rates are terrific news for prospective buyers. It makes the monthly mortgage payment more affordable. But is this good for the sellers? Although the mortgage rates are expected to stay steady during 2021, you can expect a low supply of properties available for sale in the market in 2021. It means the housing prices will rise and the sellers are going to walk away with a chunk of money.
2. Your Property Lies In A Hot Area
The prices of properties in the U.S. have doubled up during the last decade. During the last few months, some of the cities in the country specifically have experienced a massive boom in the prices of homes. For instance, in 2010 the average home price in the city of Denver, Colorado was around $2, 50,000. This average house price in the year 2020 has risen to $4, 65,000. If you happen to reside in a locality where the home prices are skyrocketing, it may be a good idea to sell the property.
Cons Of Selling The Home
1. You Have Refinanced And/Or You Are In Forbearance
There was a massive refinancing boom observed last year. With the interest rates dropping, the homeowners took advantage of the situation to refinance the mortgages for lower rates. In case you have recently refinanced your home, you are better off sticking to the current mortgage payment schedule rather than buying anything new. Around 3 million homeowners are lying in forbearance plans at the moment. In case you are one of these and you are wondering whether you should sell the home there is good news. You can in most cases. However, the money you have not paid gets added to the overall payoff including the interest you owe. In case the forbearance plan is set to end with you struggling, you can request the lender for an extension.
2. You Do Not Have A Stable Income
Although the economy has begun to recover, it doesn’t mean that everybody is back on track. If you are looking to get back to work or if you are worried about the employer making layoffs, you may think of this as the right time to sell the home and buy something more inexpensive. However, remember that a good amount of money goes into buying new properties. Things such as down payment, closing costs, insurance, and property taxes take quite a bit of money. These costs also add up fast. In case your income is not stable you will struggle to make the ends meet.
Sell The Home In 2021 Or Not?
So, should you sell your home for cash in 2021? This may work out well for you, however, it is also likely to place you in a situation where you are going to struggle to find a new place to reside. Before making your decision, research the current and future neighborhoods carefully. If you are selling and then buying a home simultaneously, ensure that you are in a good position to receive an affordable mortgage. It means you must be in a good position with limited debt, good credit, and a steady job. This will reassure the lenders that you will be able to keep up with the installments.
One thing you should keep in mind before the decision to sell your house is to check if the house needs any small renovations to be done. The house sale is more likely to be successful and profitable if the house is in good condition. So it is a good idea to give the house some final touches. For example, if you need to renovate your siding of the house and you live in Columbia then you can call your local Siding Columbia MO companies.
This is a historic opportunity to possibly save thousands of dollars on mortgage payments. But, chances are that the mortgage interest rates will not stay the same for a lot longer. Because of this, taking action immediately is critical. It doesn’t matter whether you are looking to refinance and cut the mortgage payment or whether you are ready to pull the trigger on getting a new home.