Second-time buyers are particularly popular profiles on the real estate and banking markets. But who are these owner-buyers, who can then decide to sell, rent or even demolish their first property to build the second? What is the difference with first-time buyers? What loan can they take out and what could be the impact on loan insurance? Should they sell before buying? Maisons SIC, a builder of new homes for over 50 years, helps you answer these questions.
What are the differences between first-time buyers and second-time buyers?
The French real estate market is experiencing a new lease of life this fall 2024.
According to an recent survey of the Address network, close 70% of agencies observe a dynamic recoveryThe main reason for this recovery is the strong return of second-time buyers. These buyers, already owners, stimulate transactions by selling their first property to acquire a new one, thus making the entire market more fluid.
But what really distinguishes a second-time buyer from a first-time buyer?
First-time buyers are often young adults in their thirties who are buying their first home to live inTheir motivation is to build up assets and gain stability.
Due to their emerging financial situation, They rarely have a significant personal contribution and benefit from aid such as the zero-rate loan (PTZ)Their choices often turn towards apartments located in the city center, close to amenities and transport.
Second-time buyers, highly sought-after profiles
Second-time buyers, for their part, are returning to the market with a very different project. Already owners, they are usually looking to improve their residential situation.
Whether for get more space due to a growing family, for move closer to a more pleasant living environment or for change region, their aspirations are often motivated by the evolution of their personal and professional life.
These buyers have the particularity of having an important contribution, often from the sale of their first property, which allows them to benefit from better borrowing conditions: more advantageous rates, a shorter repayment period, and the possibility of financing more expensive properties.
This difference in profile is also felt in the types of goods sought. While the First-time buyers focus on compact apartments, often in urban areas to benefit from amenities, Second-time buyers prefer larger homes, often with a garden, located in quieter, even peri-urban areas.
The return of second-time buyers to the market does more than just boost transactions. By selling their old homes, which are often more modest in size, they are offering opportunities to first-time buyers, thereby contributing to a virtuous cycle which boosts the entire real estate market.
This phenomenon also indicates renewed confidence in real estate, particularly in this context of falling credit rates and easing of borrowing conditions.
Real estate project for second-time buyers: resell, rent or destroy to rebuild?
When a second-time buyer decides to embark on a new real estate project, a crucial question arises: what to do with the first residence? The decision to resell, rent, or even destroy to rebuild depends on several factors, including financial, personal and related to the nature of the property.
Resale is often the preferred option. It allows funds to be released quickly, constituting a substantial contribution to finance the new real estate project. Indeed, reselling allows you to reinvest directly in a larger, better located, or simply better suited property to the new needs of the family. In addition, the resale offers simplicity of management: there is no longer any property to manage, and the funds obtained can reduce the need for borrowing.
The location is an alternative for second-time buyers who wish to diversify their assets and generate additional incomeIt can be an interesting option for those who are in no hurry to sell and who see rental potential in their first residence, especially if the property is well located.
Renting allows you to benefit from the potential increase in the value of the property, while ensuring regular income. However, this involves rental management, which can be complex if the owner does not wish to delegate this task to an agency.
Finally, there remains the possibility of destroy the existing property to rebuild, an option considered when a plot of land offers better potential with a more profitable new project.
For reasons of cost but also of land shortage or simply because one does not want to move, it is therefore possible to demolish one's old house to rebuild a new house on the same land.
We then draw a line under rooms that are too small, insulation or electrical problems to rebuild everything from scratch. This solution allows you to keep your exteriors, your address but to choose more modern equipment yourself, such as home automation, very personal room layouts and to optimize insulation as much as possible, new constructions being subject to RE2020.
Sell before buying or buy before selling when you are a second-time buyer?
When you want to change your main residence as a second-time buyer, a crucial question arises: should you sell your current property before buying the next one or, on the contrary, buy before selling? Both options have their advantages and limitations., and the choice often depends on the priorities and constraints of each household.
Selling before buying offers some financial securitye. By selling first, you know the exact amount you will have available to finance your new acquisition. This allows you to more calmly plan the budget needed for the purchase of your next property.
Urban artist you don't have to bear the costs of two properties simultaneously, such as property taxes and maintenance costs, which can prevent significant financial stress.
However, selling before buying has the disadvantage of having to find temporary accommodation between the two transactionsThis involves renting a property, generating additional costs and a double move.
Buying before selling can be a good solution if you have found the house of your dreams and do not want to miss the opportunity.. This also gives you more time to carry out work on your future home before moving in.
However, buying without having sold can require the use of a bridging loan. This loan is a transitional solution that allows you to finance the purchase of your new property while waiting to sell the old one. Although effective, this type of financing involves bearing the interests of the bridging loan as well as those of your initial loan, as long as your first property is not sold.
What mortgage loan for second-time buyers?
For second-time buyers, several financing options are available, including: the bridging loanThis type of loan, specifically designed to bridge the gap between the sale of the old property and the purchase of the new one, helps meet an immediate need for liquidity.
The classic bridging loan extends over a period of 12 to 24 months, offering an advance of approximately 60 to 80% of the estimated value of the property for sale. This provides the funds needed to acquire a new home while still having some flexibility in finding a buyer.
The dry bridging loan is the most basic option. You only repay the interest until your property is sold. For a more flexible solution, the backed bridging loan combines the bridging loan with a traditional loan, making it possible to smooth out the monthly payments after the sale.
the bridging loan buyout allows you to consolidate different loans into a single, more manageable monthly payment, ideal if your debt ratio is high.
Home loan insurance that takes age into account
Second-time buyers are generally older than first-time buyers, which has an impact on their loan insurance. The older the borrower, the higher the risk of non-repayment is considered by insurance companies, which leads to an increase in premiums.
However, it is possible to negotiate and compare individual insurance offers, which are often more economical than group insurance offered by banks.
Since the Lemoine law, it is also possible to change your borrower insurance at any time, a good way to benefit from better conditions throughout the duration of the loan.
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Are you a second-time buyer and want to build the ideal home for your family? At Maisons SIC, we have specialized in the construction of individual houses for more than 50 years in the South-West. Our expertise will accompany you at each stage of your project so that you can realize the house of your dreams with complete peace of mind. Contact us for more information !
