Review Your Finances To-Do List

Posted by Steve Flanagan

Before you decide on your sale price, prepare your home for sale, or start marketing your listing, review your financial situation to feel confident about your decision to sell your house and move into a new home.

Do a preliminary assessment of your home’s value.

Gather your mortgage documents to determine how much you owe on the property, including any second mortgage or equity loan you might have.

Figure your current approximate equity. (Subtract what you owe on your home from the amount you feel it will sell for.)

Add up costs you expect to incur, including home repairs or upgrades, professionals you’ll hire such as an appraiser and real estate attorney, listing fees, marketing your home and moving. Subtract that amount from total equity so you know your projected net equity.

Decide on your price range for buying a new home (or monthly rental payment if you’re not buying).

Determine approximately how much you will need on a down payment for a new home (if you will be buying) and decide where that money will come from: proceeds from your sale (net equity), current assets, borrowing from a relative or other source. If you’ll be using proceeds from your home sale be certain that the money will be there when the sale is complete.

Research mortgage lending interest rates in the area where you’ll be buying. If you’ll be renting, decide how much you are willing to pay on a monthly basis.

Calculate your approximate new mortgage payment based on the price you’re willing to pay for your new home, the down payment you plan to make and likely interest rate to be certain you’ll be able to afford your new home.

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