Could your clients sell their current home and get a bigger or nicer home without increasing their monthly payment too much? Yes, and this “Smart Move” opportunity happens when:
- Market value has increased enough on their current home, and they have a significant amount of equity (more than 20%)
- They pay Private Mortgage Insurance (PMI) on their current home
- They are willing to sell their current house and put all of their equity into the new home, and perhaps some of their savings
- Their credit score has improved by paying their mortgage.
Many people buy their first home with little money down and not always with the best credit score, resulting in a higher interest rate and PMI. As homebuyers become more established in life be sure to talk to them about the opportunity to sell their current home, get a nicer or larger home, and take advantage of their current equity to make it all happen.