Owning Two Homes at the Same Time

Article Written by : Future Finances Solutions

When you are purchasing a second home before selling your first home, it’s important that you consider all of the realistic scenarios that are out there. There are obvious risks involved with owning two homes simultaneously, and you’re going to need to pay attention to the many close details when you’re making this choice as it can come with severe consequences if worst comes to worst.

Purchasing a second home is an expensive feat that can either end smoothly or in utter catastrophe. One of the first things that you’re going to need to prepare is your finances. Be sure to check if all of your finances are in order, and if you haven’t done so already, create an emergency fund to stash away some money in the case of a problem arising that prohibits you from staying on top of your payments.

Another consideration is the equity in your first home. If you have a good amount of equity, then it’ll cushion the financial blow that you could take when taking on two mortgages at the same time. If you believe your equity is valued at a low rate, you might not be financially able to take on another mortgage.

You need to determine the amount of risk tolerance that you have when it comes to making this decision. Risk tolerance is defined as the amount of volatility an investor is willing to tolerate to achieve a financial reward. If you deem yourself to have a low tolerance, then buying a second home while already owning one home isn’t right for you.

Bio: Realty ONE Group is headed by Kuba Jewgieniew, the CEO and founder of one of the fastest growing companies in the nation.