T-Minus 420 days: Eight Financial Advisor Questions About Moving To Florida

How much of a house can we afford when we move to Florida? How can we afford the moving costs? Should we move our furniture or can we afford to buy new when we arrive? How much should we have saved before making the move? Those answers might best be found with a financial advisor, so, we had a call with ours.

Here are some of the questions we asked and the advice we received (note: don't blindly follow this advice. Talk to YOUR financial advisor about your situation):

1. When we sell our New York house, should we put all that money into the Florida house? Answer: No. Mortgage interest rates are at historic lows. Put down the minimal 20%, then invest the rest of the money into something that will earn more than the mortgage interest rate. The earnings on the investment will pay for the mortgage interest with money left over.

2. Should we move our furniture to Florida?  Answer: No. It is expensive to move items to Florida and the furniture usually arrives damaged. Sell everything, then buy used furniture when you get to Florida.

3. When should we get Pre-Approved? Answer: Typically a month before you plan to buy. Pre-Approvals expire after six months.

4. What does the housing market look like now? And in 420 days? Answer: The housing market is down, with values dropping anywhere from 10 to 20 percent. And they are going to stay down deep into next year. That is good when buying a house, but not good when selling a house. Luckily, I live in a depressed housing market, so, the dip in housing values in my area is only down 3 to 5%. My adviser doesn't believe we'll see much market improvement until a vaccine has been widely distributed by which time the economy be in trouble.

5. How much should we invest in our house to get it ready for sale? Answer: Aside from just sprucing things up, only do things to the house that will increase the house price equal to the cost. For example, if a patio will cost $3300, will the patio increase the value of the house by $3300? Unlikely.

6. Will we be able to sell our New York home and move straight into the Florida home? Answer: Unlikely. Florida is a hot real estate market and it will be difficult to purchase a home based on contract. It will be much easier to purchase a home in Florida without it being contingent on selling a home elsewhere. This is another reason why we want to sell off our possessions because the possessions may have to be kept in storage for a period of time.

7. Should we purchase the Florida Home before we sell the New York home? Answer: No. We should avoid having two mortgages to pay. Also, we shouldn't purchase now to take advantage of low interest rates because interest rates will have to remain this low deep into 2021

8. How much of a house should we consider buying? Answer: That will depend on the results of the financial plan. However, keep in mind that property taxes are very high in New York. We should be able to turn most of those property taxes into house equity, thus buy a more expensive house without increasing the monthly cost. Building more equity will build more wealth.