The #1 question I'm asked is, "How is the Market?"

If you're currently renting your home, you're probably under a lease agreement.

Maybe you've thought about buying a home - but you're not sure how to do that without breaking your lease.

And especially without having double payments between rent and your new mortgage (home loan).

In this video we talk about how to time the market to work perfectly for you to buy without having double payments or taking the risk of breaking a lease.

 Get a jump start on finding your next home: https://www.desmoineshousehunters.com/

Video Transcript

It's common that we have first time home buyers who are currently renting an apartment or a house or whatever, but they're under a lease agreement and they are thinking in advance. Like I'd really like to buy a house, but my lease isn't up for four more months.

How can I buy a house and not have a double payment, not have to pay my rent and a mortgage? How does that work? This is actually very common thing and we just have to work out the math. So we know if you're getting a loan, it's probably going to take 30 to 60 days to process all of your loan paperwork.

Some people can be done in 30. Some people need the full 60 days. It really just depends. So for the sake of this example, let's say that you need 45 days. So from when you go under contract to when you can actually close and own the house.

So let's also say that your lease is up on October 31st. So like you need to be moved out by October 31st, right? So your last rent payment is October 1st. Really? You want to close sometime around the middle of October. So that way you can move out of your old place.

 Maybe like clean a little bit at the new place, move out of the old place, move into the new place, go back and clean at the old place. You can get your deposit back. So if we close in the middle of October, then we're going to need middle of September as one month.

So the beginning of September is going to be about a month and a half or the time you're going to need to get from contract to closing. So you would need to be under contract by the beginning of September. Now, if you found a place before then, well, like let's say you found a place in the middle of August.

You could absolutely stretch your closing date out for two months for the full 60 days instead of just 45 days. Or if you didn't find a place at the beginning of September, but you did on September 14th, then you could also see if your loan could get processed a little bit faster and, and go in 30 days.

So there is some flexibility there, but that's sort of the basics just backing in the time from when you absolutely need to be under contract to your ideal time of moving out. How long is it going to take you to find a house between, you know, the time you start looking at the time you find it? Well, I don't know.

Everybody is a little bit different. Some people find a house in the first three days that they're looking. Some people take three years. So that is really something that we're going to have to figure out for you. But let's say you start looking for a house in June and then you find something you love in July and you love it so much.

You're like, I don't even care if I have a double payment. Okay, well that does give us some flexibility. And it gives you the opportunity to get the house that you want without missing out on it. Because the timing Isn't exactly right for you to go under contract the middle to the end of August, because it's July.

If you write your offer in July, let's say July 15th, then you could maybe get your offer to close. Let's say you do a 60 day closing. So July 15th, August 15th, September 15th. So if you close your loan on September 15th, then your first mortgage payment will be due the first of the month following the first full month after closing.

And the reason for this crazy algorithm is because your mortgage interest is paid in arrears. So that means that on the first of this month, when you make your mortgage payment, you're paying the interest from last month, it's paid in arrears.

So if you close on September 15th, then you're going to owe interest from September 15th to September 30th. And you're going to pay that as part of your closing costs October 1st through October 31st, I mean, you have to pay rent for October because your rent isn't up until the end of October, but you don't actually have a mortgage payment in October because that mortgage interest is not going to be due until November 1st.

So if you close September 15th, your first mortgage payment will be due November 1st. So you actually, technically you're paying double because technically you're going to owe that money for October. You just don't pay it until November and you'll have prepaid the interest.

So yes, technically you will have a double payment, but it doesn't always feel like a double payment because it comes out of your closing costs and then your payment isn't actually due until November 1st. So you can absolutely time it so that you do not have a double payment to pay mortgage and rent.

You just have to know yourself well enough to know when you should start looking. And there's also a little bit of flexibility based on when your mortgage payment is going to be due. So that might allow you a little bit more freedom of time to find the right place. So hopefully that information is helpful.

And if you have any questions or you want to, you want to start house hunting right now, well visit our website de Moines house centers.com. We have a ton of information there, or you can schedule a call to talk with me or one of the agents on my team and we'll find out exactly what it is you're looking for, how to time the market perfectly just for you and get you started on purchasing your new home.

How fun.