Sunday, June 19, 2016

How can I buy a new home while I’m selling my current one?

 A.  In this hot market, it is tough to buy a home without being able to demonstrate that your financing is in place. In today’s market, buyers often remove all contingencies when they make offers, including the contingencies around finances. The more certainty buyers give sellers, the stronger the offer becomes. With the sale of your current home specified as a contingency, sellers are less likely to consider your offer. You may start writing offers once you have a contract for the sale of your home and all contingencies have been removed, and you know escrow will close. Or you may want to wait until after escrow is closed and the proceeds of you sale have been deposited into your bank.  

At this point, however, you may have sold your old home but have not found a new home. In this case, you may be able to rent back your old home from your buyer. Or you could find a short-term rental. Or you may have to stay with family or friends while you continue to search.

Another option is to get a bridge loan, which allows you to tap the equity in your current home. With this short-term financing, you can buy a new home before you sell your house. You’re essentially financing two homes at once, temporarily. Once you sell your current home and receive the proceeds, you pay off the temporary bridge loan. However, few lenders offer bridge loans.

An alternative is to tap into a home equity line of credit that you've opened previously. Either way, you’ll need an excellent credit score and plenty of equity in your current home. If you think one real estate transaction is stressful, this is double! Make sure you get an experienced Realtor, keep calm, and carry on! 


No comments:

Post a Comment