If you’re already a homeowner and you’re getting ready to buy a new home, you know it’s tricky to buy and sell a home at the same time. There are lots of questions about how to handle this scenario. What if your old home doesn’t sell quickly?
Will you have to make two mortgage payments? What if you sell and the new owners want to move in before you close on your new home?
Depending on your situation, here are some strategies available to you.
Get A Bridge Loan
If you find yourself facing more than one mortgage payment – one on your old house and one on your new house – consider taking out a bridge loan to pay the monthly mortgage on the old house. Bridge loans are a solution to a temporary problem. When your old house sells, you pay off your bridge loan and you’re left with just the one mortgage payment.
Move Into A Short-Term Rental
If your old house has sold and the owners want to close before you can close on your new house, you could move into a short-term rental. This could be an apartment with a short-term lease. Or it could be a long-term hotel accommodation. You’d likely have to move your furnishings into storage; again, only for the short-term until your new house is available.
Ask If You Can Lease Back Your Home
You could ask the buyers of your current home to allow you to rent your home until you’re able to move into your new house. This is called a lease-back. It’s not ideal to pay rent on your own house, but it saves you from having to move twice.
This strategy usually only works if you already have a new house deal, so the owners of your old house have a known estimated time-frame when you’ll be moving out.
It’s definitely tricky trying to figure out the arrangements when you’re buying and selling a house at the same time. But one of the strategies mentioned above will likely work out for you.
Your trusted home mortgage professional is a valuable resource and can help you secure the best financing options while you are transitioning into your new home.
Are you growing tired of renting? Or perhaps you’ve recently graduated from college and are looking to set down some roots? Whatever the case, buying your first home is an exciting prospect. Let’s take a look at a quick and easy four-point checklist that you can use to determine if you are ready to buy your first home.