How To Financially Plan For Moving Out Of State
03.10.2022 | Category: Homebuying
There’s no question the real estate market has seen unprecedented demand, creating a seller’s market not seen in nearly 14 years. With home appreciation up, interest rates still low and remote work becoming more embraced, an increasing number of prospective homebuyers are looking to make a move, with millions expected to relocate out of state in the coming year.
Just like buying a house in your home state, many of the same steps will be needed to make a purchase. You’ll need to extensively research the area you’re looking to buy in and financially plan for pre-approval, your down payment, monthly mortgage and moving costs.
Lynzey Uechi, an Idaho REALTOR® with vast experience in relocation services says that a great place to start your research is by reaching out to real estate agents in the areas you’re thinking about moving to. This can help give you an idea of home prices in the area, as well as cost differences in property taxes, fees or other moving expenses.
“An ideal real estate agent will help you by answering any questions you may have about the new potential area, and by showing you homes that fit in your budget to help you get a better idea of the cost value of homes in your new state,” says Uechi. “For example, a $700,000 home in Boise, Idaho will look significantly different than one priced the same in Irvine, California.”
These differences can make a big impact on your financial picture, including how much you may need to spend on furnishings, landscaping and more. For example, if you’re planning to move to a home with a lot more acreage or square footage, you may want to research local maintenance professionals to best estimate the new costs of living. If you’re considering a move to a more expensive state, pay close attention to sales, income and property tax differences to ensure you’re properly budgeting for the home you can afford.
A reputable real estate agent can help you navigate these nuances and ensure you’re prepared for the changes. They should also be able to recommend dependable professionals for your home inspection, repairs or upgrades as well. Most real estate professionals understand the power of networking and are happy to refer you to everything from packers and movers, to dog walkers and daycare professionals.
“Opening a dialogue before your boxes are packed will give you the full value of your real estate agent's aide, and ensure a seamless transition from your current in-state real estate expert to the one licensed in your new state,” added Uechi. “The agent for you will be able to help you form a complete picture of your new state before you get on an airplane and will be excited to help you start browsing for the home of your dreams from the comfort of your current home!”
While agents who represent buyers in a real estate transaction don’t typically charge homebuyers (they receive their commission by negotiating with the seller’s agent), they do expect you to be preapproved before they start working with you to find a home in their area.
When seeking pre-approval for your mortgage loan, it’s important to work with a lender like Mutual of Omaha Mortgage who’s familiar with processing loans in the state you’re looking to live in. It’s equally important to research the type of loan you’re looking to apply for before you submit your application.
Whether you’re a first-time homebuyer or you’re relocating and selling your home, every situation is different and you’d be surprised how many different loan types can help meet your homeownership goals.
For example, FHA (Federal Housing Administration) loans are very popular among first-time homebuyers but have federal requirements you will need to follow to ensure you will be approved. Additional mortgage loan types include:
- Conventional Loan
- FHA Loans
- VA Loans
- USDA Loans
While the process is usually similar to securing preapproval in your own state, you can expect approval to sometimes take longer with a few additional steps. You will need a strong credit history, low debt-to-income ratio, a healthy down payment, steady employment and a solid idea of your budget.
If a job transition is part of the mix, you may also need to work with your employer to verify proof of income as well as about three months of estimated income saved to show your ability to make your mortgage payments and pay your regular bills. Because career changes can often result in relocating, most lenders are happy to work with homebuyers who are new to their job but may request additional paperwork.
Buying a home in another state isn't a decision that can be made on a whim. If you're thinking about moving out of state, be sure your personal finances are prepared so you're best suited to find your home in no time.
Whether you’re moving because of a new job opportunity, your growing family or a change of scenery, Mutual of Omaha Mortgage loan officers can help you with the home loan process.