If you haven’t been able to tell by now, The PTP Team has grown in recent weeks. Now, here on the blog, we’re aiming to provide additional perspectives using Pete’s & Damian’s expertises. In this Reflections series, the goal isn’t to simply regurgitate their radio show transcript, no! That wouldn’t be fun for any of us. Our Reflections posts will focus on the big lessons they share on the show and provide additional resources to help them sink in.
With that, let’s get into Episode 330!
The first scenario the hosts brought up was a good one with some teeth, I think. Here goes: the writer was 64 years old, married, and looking to move, but not necessarily downsize. They’re looking for their last home; their retirement home. They know a few things:
- the listed homes they’re interested in sell quickly
- their current home is paid for
- they don’t want a new mortgage
As we’ll find out, this is great info. Mr. Writer presented two options he and the Mrs. have been made aware of… (and if you want the finer details with all the numbers, click here to take a listen to the show.)
Damian immediately points out the first solid piece of wisdom here: “Have an end-game in mind, then set about finding financial options to make it happen.” In other words, it’s helpful to know what you want, and to know what you want to avoid. It makes narrowing your options much easier.
One of the possible options the writer presented was to deploy a HELOC to to use the equity in their current home as payment toward their new home. Oh, by the way, HELOC means Home Equity Line of Credit.
Right off the starting line, Pete imagines the HELOC is the best option. Many of us know that it costs a fair bit of money to start a new mortgage when buying a home. The roughly $5k in fees just don’t make sense to incur as an expense in this case. The HELOC option tends to have fewer fees and lower interest rates. so this could help them secure a new home using the one they’ve already got.
Damian chimes in with a “Not so fast.” Revisiting the writer’s message, he calls out the point that the houses they want sell quickly. Right now, in many places, the housing market is doing well, indicating that could be accurate.
Here’s where things get interesting…
Damian suggests they go ahead and put their house on the market. At first, this wasn’t what I was expecting to hear from Sage #2. Once I let his suggestion breathe, I found the smart consideration in his suggestion: Consider the dreaded “Double Move.” We’re all about being smarter with our money, so let’s entertain the possibility of a short-term inconvenience such as this for some financial good. Say they put their house up and need to rent a furnished apartment for a month or two. That could be fine, as they could have a higher likelihood of incurring little to no debt during the switch. Admittedly, the real magic here is timing: it’s crucial to examine the market to find out how quickly their house would sell.
Now, we’ve got two options on the table. It’s time to go further into the details to really pick apart feasibility. The age of the writer could play a factor: moving twice in a short time span could be less appetizing the older one gets. Maybe due to age, the best move may be the HELOC with the $2,100 in fees vs. the new mortgage with +$5K in fees. Not to mention the crazy list of “What Ifs:” What if a buyer doesn’t come along quickly, what if their financing falls through, what if they held onto the first home too long and the market turns down… etc. YIKES. So does age win the war of ideas?
What do you think?
THERE WAS THIS GEM. 💡 Considering the home buying market now, carefully, they could get a skilled realtor with a great network, put the home on the market, test the feedback they get, stay somewhere temporarily or take a vacation, and have their stuff shipped to the new house! Well now, how about that?
BOOM! There it was. A LIFEHACK (not) in the flesh.
(Assuming plans are in place), put your house on the market, take a well-timed vacation, stow your belongings in a pod, and have them waiting for you at the new place when you return.
In Pete’s own words: “Put the house on the market, try to time it up, if you can’t, go on a vacation, and it will all be better.”
The main thought I took from it?
Do your research. Know what possible outcomes you do want to see just as much as you should know those you don’t want.
If you have not yet checked out the show to listen to the bonus content about putting a portion of ones Emergency Funds into the market… that one’s a good time. Super intriguing insights in there. Click the box below.
Brent Lyle is the Digital Marketing Coordinator for Your Money Line, the financial help line serving all Pete the Planner® Financial Wellness clients. Brent is a marketing wünderkind who delights in telling the story of brands. On nights, weekends, and anywhere in between, you’ll find him lending his skills to a number of charitable organizations.