In many ways, 2021 disappointed pandemic-weary young families longing for larger housing. In their quest to buy a bigger place, many competed in fiercely fought bidding wars. Yet due to a shortage of inventory, they went home empty-handed.

But some homeowners seeking more spacious quarters have a Plan B. Through mortgage refinance, they can generate enough funds to expand their current property.

“Your chances of buying a bigger house in a hot neighborhood are greatly limited right now. Yet if you’re rich in equity, it’s comparably easy to refinance and take out cash for an addition,” says Michael Crowley, an independent real estate broker.

In recent weeks, mortgage rates have been on an upward trajectory, though they’re still hovering just above historic lows. One explanation for rising rates is that the Federal Reserve is pursuing tighter monetary policy to combat inflation.

“Nobody is cheering for higher rates. But they may be a necessary evil to tame an out-of-control economy,” says Keith Gumbinger, a vice president at HSH Associates (hsh.com), which tracks mortgage markets throughout the United States.

Some younger families are apprehensive about adding to their mortgage debt, given the rising cost of living --especially for food, gas and child care. What’s more, millions are still paying off student loans.

But if the numbers work for you and your finances are in good order, doing a cash-out refi could help you create the more commodious living space you seek for a reasonable cost.

If it’s been several years since you last applied for a mortgage, you may need a refresher course on the basics.

“Don’t let your fears about how to proceed keep you from moving forward with your refinance plans. Especially now, when rates are forecast to go higher, it’s a mistake to hem and haw in hopes they will drop again before you apply,” Gumbinger says.

Assuming you have good credit and steady income to repay a larger mortgage, you should face few barriers in the mortgage application process.

“Of course, there are hoops to jump through, but none are substantial unless you are self-employed or have a spotty job history,” says Crowley, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

In most ways, applying for a cash-out refi is no different than applying for a plain vanilla refi or a mortgage to purchase a home. Here are a few pointers:

-- Educate yourself on mortgage basics before you apply.

Sid Davis, the author of several real estate books, says the main concepts of mortgage lending aren’t hard to grasp if you take a little time to do so. You can do a quick study of mortgage essentials by visiting the website of the U.S. Department of Housing and Urban Development: hud.gov.

In addition, he suggests you pick up a book on mortgages, though anything published more than a year or two ago is likely out of date.

“When it comes to mortgages, the turf is changing so quickly,” he says.

-- Seek a lender who will meet you face-to-face.

Most lenders are comfortable taking refi applications from homeowners they’ve never met. On a technical level, there’s no reason your lender can’t process your application by phone, text, email, fax or overnight delivery, says Marty Qualls, a Utah-based lender who originates mortgages for several large banks.

“But you’ll have a lot more credibility with lenders if you go into their office,” says Qualls, who’s been in the mortgage business since 1992.

Meeting face-to-face is an especially good idea for borrowers who anticipate special challenges to loan approval. Such applicants include entrepreneurs and those with relatively limited assets.

-- Respond promptly to your lender’s request for documents.

Dale Robyn Siegel, a lawyer and mortgage broker, says that due to strict federal regulations -- many imposed after the housing downturn of 2008 -- loan officers must work diligently to assemble the files needed to meet the exacting requirements of their underwriters (who have the final say on approval). Hence, they’re grateful to applicants who help them obtain documents without nagging.

“Good preparation is a big plus,” says Siegel, author of “The New Rules for Mortgages.”

Ideal loan applicants arrive at their initial appointment with all the primary documents they’ll need, including recent pay stubs, W-2s, bank statements and tax returns.

Mortgage officers are also pleased when loan applicants review their credit reports in advance of applying. Under federal law, you're entitled each year to one free credit report from the three large credit bureaus: Equifax, Experian and TransUnion. Just go to this website: annualcreditreport.com.

You may also want to access your credit scores. Such scores, which draw on data from the credit bureaus, provide lenders with a quantitative measure of a person's credit risk. Most lenders use FICO scores, pioneered by the Fair Isaac Corp., though other rival scores are also now in use.

Normally, you need to pay a fee to obtain your credit scores. One approach is to buy these through the Fair Isaac website: myfico.com. You can also receive credit scores through the credit bureaus. FICO scores range from 300 to 850.

-- Stay in close touch with your lender until the new loan closes.

Given recent problems with credit that have exposed record numbers of consumers to identity theft, some refi applicants are now facing complications.

Davis says lenders appreciate applicants who reply promptly to their requests for information and communicate often while their applications are under review.

“Whether you stay in touch by text, phone or email, connecting with your lender nearly every day is a great idea,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

After hitting 65, a divorced doctor in a New York City suburb began ruminating about the possible sale of the spacious Tudor where she’d raised her two children.

“With my kids grown and away, I’m rattling around in this big place, which I could sell in a flash. But the hard part is figuring out where to move next and the economics of making a move,” the doctor says. “I’m still working and traveling the world, so the notion of hunkering down in a retirement community leaves me cold, as do lots of condos. What I’d really like is a small single-family house nearby with a little garden. But there are zero such available listings in my local area,” she says.

Jeff Tucker, a senior economist for Zillow (zillow.com), doesn’t know the doctor in this true story. Yet he’s not surprised that her attempts to find housing have been frustrating.

“Home shoppers picked the shelves clean this December, leaving fewer active listings than ever before in the U.S. housing market,” says Tucker, noting that limited supply continues to push up prices.

Though the doctor is one empty nester who’s emotionally ready to list her big family home, other seniors are more ambivalent about downscaling, especially because the oversized family homes they occupy continue to gain value.

“The fact is that indecision about whether and where to move is paying off for people who are torn on selling,” says Eric Tyson, author of “Personal Finance After 50 for Dummies.”

After their children leave home, many homeowners find it emotionally difficult to let go of a property so laden with memories. He says this is a good time to take stock of your housing needs and overall financial situation, though many fail to seize that opportunity.

Cary Carbonaro, a financial planner with more than two decades of experience, says it’s not up to those in her profession to go beyond their role as advisers to clients struggling to make the right housing choices.

“Where they live is really a personal decision. I wouldn’t want to tell clients what to do,” Carbonaro says.

Here are a few housing-related pointers for empty nesters:

-- Think through the pros and cons of selling your current home.

As Carbonaro points out, some parents of children who have grown up and left home wish to hang onto the large family property because they want to take advantage of the extra space in new ways.

“They turn their kids’ rooms into fun rooms for themselves -- media rooms, hobby rooms or exercise rooms,” she says.

Nonetheless, Tyson cautions homeowners -- especially those with a sentimental streak -- against clinging to the big house with the uncertain hope that it will become the hub for many extended family gatherings.

Perhaps your children will marry and move to a distant state, coming to visit you only occasionally during summer vacations or possibly at Thanksgiving. “Do you really want to carry the costs of a house that’s too big for you just so you can entertain your kids there a few days a year?” Tyson asks.

-- Consider seeking expert financial advice.

“Most financial planners aren’t set up to deal with specific issues, such as what to do with the family house when the kids have moved away. They’re more focused on creating a comprehensive plan for allocating their clients’ investment funds,” Tyson says.

However, by going through a professional group such as the National Association of Personal Financial Planners (napfa.org), you should be able to locate a planner you can hire for just a few hours to discuss your empty-nest housing issues.

Additionally, Tyson recommends that you seek out advice through a certified public accountant who has also been trained as a Personal Financial Specialist (PFS). The American Institute of Certified Public Accountants awards this designation. You can locate a PFS in your area by visiting the group’s website: aicpa.org.

-- Include retirement planning in your housing analysis.

Obviously, many people reach the kids-are-gone stage with years left in their careers and a strong desire to continue working. But that doesn’t mean they can afford to be oblivious to their future needs for retirement income.

“A fair number of boomers have under-saved for retirement,” Tyson says.

If you’re in this category and your home has appreciated substantially, selling could open the way for investments that are potentially more lucrative.

“I’m talking about freeing up money from your current house by moving to a property that has a smaller mortgage and is less expensive to maintain,” he says.

-- Start making your housing plans sooner rather than later.

Some people appreciate the expanded freedom that comes with an empty-nest life. But others are depressed after the last child leaves.

“A lot of times people are in denial. They run away from making hard choices, such as whether to sell the big house and move,” Tyson says. He says those in a funk about their new status as empty nesters can squander several years failing to explore and consider alternatives to staying put in their current home.

“You don’t want to rush into a decision, but you shouldn’t dawdle either,” Tyson says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Many renters in their 30s have been struggling to buy a house since the pandemic hit in 2020. This was the year they hoped for relief. Yet, affordability challenges keep mounting.

“First-timers feel the real estate market is ganging up on them, and unfairly so. It’s not just rising home values and short supply. Now they’re scared by jumps in mortgage rates,” says Mark Nash, the author of “1001 Tips for Buying and Selling a Home.”

But despite their aggravation, housing analysts say would-be homeowners are as determined as ever to finally reach their goal this year.

“With more sellers expected to enter the market as buyer competition remains fierce, we anticipate strong home sales growth,” says Danielle Hale, who heads the economics team at Realtor.com, a California-based property listing company.

Given their financial challenges, many home-buying hopefuls must rethink their aspirations, says Stacy Berman, a veteran real estate agent who sells property in the Washington, D.C., suburbs.

“To afford a place now, lots of purchasers must widen the scope of their search and consider neighborhoods not previously on their radar screen,” Berman says.

To win in a bidding contest, buyers must also take a strategic approach when crafting an offer. That means tracking local pricing trends in the area where they’re looking and learning about the seller’s motivations.

Here are a few pointers:

-- Inform yourself on local property values before you bid.

Eve Alexander, a Florida-based real estate broker who works solely with buyers, says buyers need context on prevailing values to make certain they don’t offer too much.

“For comparisons, try to identify five to 10 comparable properties that have sold recently in the area where you’re looking,” Alexander says.

If you’re seeking to buy in a neighborhood with widely varied properties, it’s helpful to compare the homes on your list on a price-per-square-foot basis. Then adjust for differences in size and home features, such as a two-car garage versus a one-car garage.

After estimating the current market value of the place you wish to buy, it’s time to decide how aggressive an offer you want to make. Alexander says that will depend on how enamored you are with the home.

“You won’t want to push the limits if you’ve fallen in love with the property and feel it’s a ‘do or die’ situation,” she says.

On the other hand, you might choose to make a lower offer if there are other available homes in the area that would meet your needs equally well.

“It’s always easier to negotiate without emotion if you can find second- and third-choice houses you also like,” Alexander says.

-- Avoid relying on comparable sales from “market testers.”

Eric Tyson, co-author of “Home Buying for Dummies,” says in every market there are a few sellers who won’t budge from an unrealistically high price.

“It’s a given that some supposed sellers aren’t really motivated to make a fair deal,” he says.

How can you tell which sellers are merely testing the market and will never negotiate seriously with anyone who bids less than their lofty list price?

Tyson recommends you ask your agent to find out if previous offers have come in on the property you want. If the owners have already rebuffed one or more decent offers without so much as a counterbid, this indicates they’ll probably resist reason with you, too.

The good news for buyers is that information on past offers is often readily available through the listing agent.

“Agents are inherently outgoing people. Some have very loose lips and will talk candidly about their clients’ negotiating position,” Tyson says.

-- Investigate the seller’s equity position.

Are you seriously interested in a home, but have yet to submit an offer on it? If so, Alexander says it’s wise to inform yourself on the sellers’ ownership stake before you bid. As she says, those with more equity have more potential room for compromise.

“What you’re looking for are insights into the mindset of the sellers,” Alexander says.

One source of clues on the owners’ equity position can be found by searching local government land records. At the minimum, these records (available online) should tell you when the current owners purchased the property and the original price they paid.

“If the sellers brought the house a couple of decades ago and haven’t refinanced, they should have a lot more equity,” Alexander says.

-- Ask your agent to pose questions to the listing agent.

When owners have an urgent need to sell, it’s normally against their interest for that information to be broadcast to the world, as it could weaken their bargaining position. Even so, Alexander says many listing agents will readily divulge such client information in response to questions.

“You’d be amazed how much listing agents will tell all to a buyer’s agent,” she says.

Another way prospective buyers can gauge the sellers’ level of motivation is to ask nearby neighbors. Alexander recommends that the buyers pick a weekend time to walk through the community, chatting with a few residents about the pros and cons of living there. In the course of the conversation, they’ll likely tell you what they know about why nearby homes are for sale.

“In many cases, well-informed neighbors will be happy to give you the inside story,” Alexander says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)