Purchasing a New Home (Upgrading)

Here you will find the steps for purchasing a brand new home or upgrading to a more expensive home. If your scenario includes selling a home first, please click here for details on how to do that in Snap.

In this example, Mary Snapper plans to purchase a new more expensive home in the year she turns 66 and starts another mortgage as well. We have already entered the first home sale in the projections and paid off the first mortgage with the proceeds of the sale. Automatic cash-flow management is turned on in this scenario.

1

Determine the future price of the new home.

How much will the client expect to purchase a more expensive house for in the year she turns 66? At the end of the previous year, the original house was valued at $631,777. We will enter a new home with a purchase price of $900,000.

NOTE: For a scenario with a jointly owned Real Asset, use the Combined page to determine the future value of the home when it is sold.

2

Go to Scenario Setup -> Assets.

3

Enter a new Real Asset with a Future Purchase Age equal to the Future Sale Age of the original property. (If you prefer to enter a date rather than an age, click the gear icon to the right of the cell.) Enter the amount of the new Real Asset in the Cost column. This is the nominal dollar value for the new home, the value of the home in future dollars (in 2029 in this example). The Value column will be uneditable and display a $0 value. This is because the new home has not yet been purchased and its current value for Mary is $0.

4: Go back to the Planning page and run the scenario. In this scenario, Snap has made withdrawals from her Capital Assets to support this purchase.; The mortgage was also paid off with the proceeds of the home sale because the mortgage was linked to the house on the Debts page. A new mortgage can be started in order to prevent large withdrawals from Mary's accounts if desired.