Three options for people who need to buy a home before selling.
Selling your current home before buying a new one is the conventional way to move. However, depending on your situation, there will be times when buying before you sell is the better option. Whatever your reason, you should know that buying first comes with additional risks, such as paying two mortgages, if your current home takes a long time to sell.
If you’re in a situation where you must buy first before selling, don’t worry. It’s not completely impossible, but it takes some strategic planning to make it happen. Here are three things you can do to help you buy before you sell:
1. Utilize a home equity line of credit. Using a home equity line of credit (HELOC) to borrow equity from your old home can help you supply the down payment for the new one. The HELOC will need to be combined with a mortgage for your new home. Getting approved for a HELOC and a new mortgage while holding the mortgage on your old home can be challenging and may result in paying several mortgages at once.
“Innovative companies are changing the way people buy and sell homes.”
2. Finance with a bridge loan. A bridge loan is a short-term, high-interest loan. When you buy with a bridge loan, you can use your existing home as collateral to get a loan for your new home. To close your bridge loan faster, try to align the closing dates of your buying and selling transactions.
3. Become a cash buyer. Innovative companies have created cash offer services that are changing the way people buy and sell homes. These types of creative products let you make competitive cash offers on your dream home before the sale of your old home, and they help you avoid paying two mortgages at the same time. We may be able to help you make your next purchase with cash.
Buying a new home before selling your existing one has its unique challenges, but if you can leverage the three options above and utilize the guidance of an experienced agent, you can come up with the best solutions for your situation. If you want more details about this topic or have any real estate concerns, don’t hesitate to call or email me. I’ll be happy to help.