One of the biggest challenges of moving is figuring out how to buy and sell a home at the same time. The problem arises when you already own a home, but want to buy a new home to move into. You can’t ever be sure of the exact date when your existing home will sell, and you don’t know when you’ll be able to find and move into your new home. Unless you’re a cash buyer, dealing with the mortgage issues presents yet another challenge. Here are four tips to conquer buying and selling a home at the same time.
1. Decide whether or not you are willing to purchase your new home prior to selling your current home.
One option for buying and selling at the same time is to go ahead and buy your new home before you have a buyer for your existing home. Doing this has the advantage of ensuring that you are never in-between houses, with no place to live except your in-laws or a rented apartment or hotel. But the issue with this scenario is that you will have two mortgage payments to make – one on your current home and the second on your new home. You have no way of knowing how long you’ll have to keep up with two mortgage payments, and the added financial burden could be problematic if your current house doesn’t sell in a timely manner.
2. Review your mortgage qualifications thoroughly.
If you do end up making the decision to buy a new home before you sell your current one, you still need to get approval to do so from a lender. Some lenders may not allow you to carry two mortgages on two different properties at the same time. Before you go house shopping and/or make an offer on a new house, it’s advised to get a pre-approval letter. This will ensure that a lender has done a thorough, in-depth analysis of your income, assets and expenses and has determined you would be eligible for a second mortgage. The experts at American United can help you in going through the necessary approval process.
3. Figure out how to access funds for your new purchase.
If your old home sells before the closing on your new house, you’ll have little problem using the net gains to finance the down payment and associated costs with your new home purchase. However, if the sale of your current house is delayed for any reason (the buyer’s financing falls through, the buyer changes their mind or wants new terms, etc.), you’ll be stuck trying to figure out how to access funds for your new purchase. Try not to rely solely on the sale of your old house in order to finance your new one. You might be able to get a bridge loan that will carry you through to the purchase of your new house until your old one sells. Or, you might be able to use the equity in your current home to obtain an equity loan; the funds of which you can use to pay for your new home costs.
4. Use These Selling Tips
To ensure the best possible chances of selling your existing home quickly, rely on the professional expertise of a qualified real estate agent in your area.
Make the effort to stage your home. Statistics show that staged homes sell for up to 17% more than non-staged homes.
Take care of repairs before listing. Don’t take the chance that a buyer will hold you hostage with an unexpected home repair before buying. Get your home inspection early and complete all repairs before listing.
To buy and sell a home at the same time:
- First decide if you want to pay two mortgages
- Get a pre-approval from a lender
- Figure out your funding sources
- Use selling tips to sell your home fast
Help me buy a home!
For any of your home buying or financing questions, feel free to reach out Joe Farella, Industry expert, Author, and EVP for American United Mortgage Corporation, Scotch Plains, NJ. Joe can be reached at: 908.322.5423 or by email: email@example.com