When is a normal mortgage not a normal mortgage? When the borrower(s) is/are relocating to a new area. This is especially true when there is a job change for one or more borrowers.
Every mortgage loan is somewhat of a process, no matter how simple it appears on the surface or how well qualified a borrower is. Relocation adds a few elements into a transaction that aren't present under 'normal' circumstances. Relocation often couples the stress and frenzied days that accompany buying and moving into a home with the same level of craziness that comes with a job change. On top of that, in many instances families are separated as one makes a move to start working or finding a home while someone stays behind to manage a home sale or keep atop of the life they're leaving behind. A relocation can cause a lot of confusion and stress for people, so it's important that when relocating, you work with a professional that not only understands your needs for certain products and services when it comes to moving, but understands what you're going through on an emotional level as well.
When relocating, having knowledgeable professionals in your corner should be your first priority. Your real estate agent and mortgage professionals should be able to provide you with all of the information you need to quickly adapt and become comfortable in your new home, and they should also have answers to the questions you don't know you should be asking, like:
- If your company has a relocation package for you, do you know what the parameters are? Are you limited to certain moving companies, real estate firms, mortgage lenders? Or can you choose?
- What obstacles will you run into if you haven't sold your current home prior to the relocation?
- What additional costs are there in the area to which you're moving? If you're moving to CA, what in the world are mello-roos? If you're moving to DE, are you aware that the transfer tax on a buyers side is typically 1.5% of the purchase price of a home?
On the mortgage side of things, there is no such thing as a "relocation mortgage" per se, but there are certain programs that help folks relocating more than others, and not every lender offers them.
One such program is a job offer letter mortgage, which is an incredibly helpful loan for those in the world of academia or those involved in a corporate relocation. With this program, you can use future income to qualify for a loan before your official start date at a new job. This eliminates the need and hassle of a short term rental.
Another guideline is helpful if you have a home that hasn't sold yet, and you need to buy another. If you're planning on renting your current home, it can be done with no deposit money, and no reserve requirements -- a simple lease will allow you to use the rental income to qualify for your new home.
Neither of the above programs are specially geared toward relocation borrowers as they are standard conventional mortgages, but both are helpful, and not offered at every lender and bank - many banks have overlays that won't allow for the above, and if you're already dealing with the stress of moving, you don't need the stress of overlays causing you additional headaches.
When relocating, you need professionals that work as a team, and know what you need - you should have resources at your fingertips, and have all of the info to not only local necessities like utility companies, but useful local tips (like if you're buying just a short commute from the beach or in an urban area...where to park without going broke!?) - things like where to eat, what local community events are available to get to know your neighbors, storage facilities, pet sitting services, and all of the other things that without knowledgeable professionals, you'd spend a lot of time researching and stressing over yourself.
As someone that's relocated nearly 3000 miles myself to a place full of strangers and unfamiliar things (What's a freeway? Where'd the highways go?), I understand that relocation buyers need special attention, special information, and need help to not only make the move, but to be happy and comfortable in their new home.
If you're relocating or moving somewhere that's new to you, be sure to work with a team of professionals that understands what you're doing, and can help you make your move with as little stress as possible along the way.
Have questions about a relocation mortgage, or relocating to CA, DE, FL, NJ, or PA and need help finding local professionals to help you? Reach out and ask an expert here!