Advice for second-time home buyers: What to know

When you’re looking to buy your second home, it’s good to refresh yourself on the process. A lot can change the second time around. What advantages do you have as a current homeowner? What programs can you qualify for? What’s the current state of the housing market?

If you’re asking these questions, you’re already ahead of the game. Let’s get those questions answered and more, starting with some helpful tips to simplify your journey toward homeownership.

Is it easier to buy a home the second time?

Already having the experience of buying a home gives you a big advantage. Your expectations are more realistic, and you’ve likely learned how to deal with common bumps in the road to purchasing.

That being said, no two home purchases are the same. When both the market and your life evolve over the years, you should prepare to encounter a whole new set of considerations.

You may be buying and selling at the same time

When you transition from your first home to your second, you may have a period of time when you own both. The more you can minimize this time frame, the less you’ll have to worry about double mortgage payments and double property responsibilities.

Another possibility to plan for is selling your first house too early before buying your second. As you know, closing on a home takes time, and you don’t want to end up without a place to stay.

These complications may arise when you need to sell your current home to make your new down payment. That's the reality for many second-home buyers. If this sounds like you, look into a home equity loan or a bridge loan. These personal loans come in handy to bridge the gap, and you can repay them after you sell your first home.

While Rocket Loans^SM doesn’t currently offer bridge loans, we can help you explore options during this transitional period.

Housing prices may have changed

Familiarize yourself with recent trends in the housing market to help you modernize your budget.

As of February 2025, the new home median sales price in the U.S. was $414,500, according to the Federal Reserve Bank of St. Louis. Compared to $420,900 in February 2024 and $433,300 in February 2023, median home prices have been relatively stable, dipping only slightly, for the past 2 years. If you purchased your first home recently, current sticker prices should come as no shock.

But the story is different the longer you’ve held onto your first home. The new home median sales price was $331,800 in February 2020 and $286,600 in February 2015. On one hand, homes will be pricier than you may remember. On the other hand, your home should have likewise appreciated in value over the years, giving you more purchasing power.

The real estate market may have changed

Homes available to you depend on the development of the housing market. In 2025, housing inventory continues to sit at unprecedented lows, but there’s a moderate upward trend. You can adjust to this market in a few ways:

• Offer higher bids to compete against other buyers.
• Make decisions quickly — houses move off the market fast.
• Think about what you need in a house versus what you want in a house to keep your options open.

Another smart play is getting preapproved for a mortgage. Preapproval is a process where a lender provides an estimate as to what you could borrow, and at what rate, for your next home. Sellers often hold preapproved buyers with higher consideration, which is good news for you.

Expect higher-than-normal interest rates. As of April 2025, the average interest rate for a 15-year fixed-rate mortgage stands at 6.0%, a hike from 4.2% in April 2022, as reported by the Federal Reserve Bank of St. Louis. A 30-year fixed-rate-mortgage, meanwhile, is 6.8% as of April 2025, higher than the 5.0% rate in April 2022.

Online home buying has grown in popularity

One major difference over the years is the increasing popularity of online home buying. Now you can increase the speed and breadth of your search. Keep in mind, your competition has access to these tools, too, increasing demand for homes. Also, always check for added fees.

Manage inspections and home showings with third-party buyers such as Orchard. While this service adds an extra cost, it takes some of the work off your shoulders. Or consider virtual agents like Redfin that cost less than a traditional real estate agent.

Forget about fax machines; virtual documents, electronic signature apps, and online notaries are becoming more of the norm as real estate agents continue to modernize. You can get preapproved online with Rocket®. Our Prequalified Approval enables our team to verify your credit and debt and estimate your income and assets — all without stepping foot in an office.

For an even stronger approval, try Verified Approval from Rocket. Our loan officer will check your credit, W-2s, tax returns, bank statements, and pay stubs for an even more accurate estimate of how much home you can afford.

Second-time home buyer requirements

While a lot has changed over the years for buying a home, the requirements remain mostly the same. Let’s take a look at a few of them.

• Credit score: Your credit score measures how well you’ve handled debt over the years. Mortgage lenders like to offer lower interest rates to less-risky borrowers. On the credit score scale from 300 – 850, you’ll want to hit 620 or higher for a conventional loan. If you aren’t there yet, try looking for ways to prioritize debt repayment over other expenses.
• Debt-to-income ratio: Debt-to-income ratio compares your gross monthly income to your monthly debt payments. Lenders like to know that you have enough money coming in to cover a loan. You’ll want a DTI ratio around 43% or less to qualify. If that doesn’t sound like you, try alternative lenders and loan programs that accept higher DTI ratio applicants, like a Veteran Affairs loan or a Federal Housing Administration loan.
• Down payment: A down payment is how much you pay up front when purchasing a home. The larger your down payment, the lower your interest rate. Spending more now can save you a lot down the road, but always consider your immediate financial needs, too.
• Income requirements: If you want to borrow money, you’ll have to prove you can afford the monthly mortgage payments. That’s why your lender will check in on your income and assets before offering the loan. Prepare in advance your W-2s, pay stubs, bank account statements, and income tax returns for this part of the process.

The bottom line: Approach the home buying process with confidence

As a homeowner, start the home buying process knowing full well you have the background and wisdom needed to make the right decisions. Plenty has changed since closing on your first property, and so have you. When it comes to buying your second home, experience is often the best teacher.

Ready to finance your second home? Get started online today with Rocket Mortgage.