In a competitive housing market, homes can be on sale one day and there can be a sold sign out front the next day! So if you find a home you want, you need to be ready to make an offer. What happens when you own a home and need to sell it before you buy a new home? I get asked this a lot – for some it may just be easier to move before getting your home ready to sell, for others they may just want to be able to move quickly. So what are your options?
There are different programs available to you if you want to buy before selling. For some, it can be easy. Maybe you have enough in savings to use for a down payment without selling. You may be able to qualify for the new home and your current home, use your savings and move before selling. If this is an option , it can make it easy. You can also take the money you get from selling later to put down on your new mortgage and recast. A recast means you put a large amount down on the current mortgage and have your lender adjust the payment to your new balance using your current interest rate. There is a fee to do this, usually about $350-400.
For those that do not have the savings and need the equity from your home, there are some options. You may be able to qualify for a bridge loan. That takes the equity from your home and you can use that as a down payment. Depending on the bridge loan, you may need to be able to qualify for the new home, current home and bridge loan. That may be difficult, but can be an option.
We also have some programs that allow you to buy now and sell later without having to qualify with your current mortgage payment. Most of these programs may have a slightly higher interest rate, but could be an option for you. You need to plan to sell your home within 90 days after closing.
For those of you thinking about buying before selling, talk to your loan officer about options and plan the best way to get into a home. You may have a home equity loan already set up, that can be another option. We are here to help you figure out the best way to get into your new home!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
