Whether you’re just starting out, middle aged or nearing retirement there are different mortgage options that will work best for your luxury real estate. Here we’re going to explore how to finance homes for sale that you want to buy and how to figure out which is right for you. Let’s get started!
Luxury Home Still need Financing!
While you might be buying luxury real estate, you’re going to still need that down payment and financing available for it. It’s not always a smart move for your credit to pay outright with cash, even if you can afford to. You’ll also slowly build equity in your home that you can borrow against as time goes on. If you want something that you can build and borrow against, you can never go wrong with luxury real estate.
First Time Homebuyer
It’s always exciting being a first time homebuyer! There are many luxury homes for sale right now and you can get great deals… but how are you going to finance it? The best kind of mortgage for a young or first time home buyer is going to be a low down payment long term (20 to 25 year) conventional mortgage – you should always put down the MAX possible amount when you buy real estate, this way your payments will be lower and you’ll be able to pay off faster. The mortgage rules changed in 2012 to a max length of 25 years, which is more than enough time to pay off your mortgage.
Middle Age and Home Hoppers
If you want to buy luxury real estate (especially if you’re upgrading from a different kind of home), you’re going to want to look at your current situation. Do you own your home outright and just want to find a new home? If so, you can take out a home equity loan (second mortgage) to buy your next home – once your current home sells you’ll be able to pay it off and you won’t be stuck in the same house until you can sell it.
If you’re buying luxury real estate prior to retirement, opt for a shorter repayment term. You’ve been saving all that money all this time for a reason! Most Baby Boomers and older have been taking out 15 year fixed rate mortgages more now than ever before. With interest rates so low it’s a great time to finance luxury real estate.
Whatever you do, it’s important to be aware of your options. If you’re just starting out a long term fixed rate conventional mortgage is going to give you a great chance to buy luxury homes for sale. If you’re middle aged you’ll want to go for a mid-range mortgage, and if you’re retiring short term mortgages 15 years and under are the best option for you. Whatever you do, talk to a financial consultant and work with a luxury realtor to make sure you’re getting the most for your money.
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