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Are You Financially Ready To Sell Your Home?

Are You Financially Ready To Sell Your Home?

For many home owners, it is all about being financially ready as the biggest sign that you’re ready to sell your home. This often comes down to one main factor; equity!

As we all know, there was a housing meltdown between 2008 and 2009 when millions of homeowners in the UK found themselves with negative equity. This means that homeowners found that they are in a situation where they owed more than their homes were worth.

When you have negative equity, it is a bad idea to sell your home. This is known as a ‘short sale’ and something that, as estate agents in Peterborough, we would recommend against doing. While breaking even on your home is better than a short sale, it still isn’t ideal.

However, we understand that in some circumstances selling your home when you have negative equity is the only option; for example, to avoid bankruptcy or foreclosure.

That said it is no longer all doom and gloom. For the last several years the values of homes have been on the rise. This means that homeowners are building equity on their properties, resulting in homes now being worth more than the homeowner owes. As this trend continues, homeowners will be able to pay down their mortgages, while the value of their home continues to increase.

A report created in the last quarter of 2016 showed that a huge 93.8% of mortgaged homes have a positive equity. It is likely we will see similar reports for the last quarter of 2018 too.

So how can you find out if you are financially ready to sell your home and if you have built up equity on your property?

It’s actually a lot easier than you might think.

Take out your latest mortgage statement and check your current mortgage balance. You then need to check how much your property is currently worth. Take the current mortgage value from the market value of your home and this will tell you, roughly, how much equity you have built up.

While it is tempting to use online valuation sites this will not give you a real idea of how much your home is worth. We would recommend that you call one of our professional and friendly estate agents in Peterborough around to complete an accurate and professional valuation on your home.

But how much equity is enough to be financially ready to sell your home?

Ideally you want enough equity to pay off your mortgage with some left over to put a 20% down payment on your next property. We would recommend this as the very minimum. If your sale can cover closing costs and moving expenses too, or enable you to put down an even large down payment then this is even better for you.

If you’re not sure if you’re ready to sell your home or have questions about putting your home on the market, then please contact us directly. We would be happy to discuss any queries you might have.