Must sell old 2 buy new home. Is it good or poor risk 2 enter n2 new contract PRIOR 2 sale needed b4 close?
Posted by | Posted in Buy My Home Fast - Questions & Answers | Posted on 23-03-2010-05-2008
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What are the stats on this type transaction? Need +equity n sale 4 new home buy. Cannot afford 2 mortgages! Builder suggested qualifying w/current home as rental income until it sells. The time push here is a fast approaching specific lot release and build order.
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You can make you sale conditional on finding a new home, and you can get a “bridge loan” from the bank to buy your new home before you sell your old one. In this economy make sure you set one or both of those up, because it is very difficult to get into the same standing you had before you sold. meaning that the minute you sell your house the homes of equal value all seem to be shacks in comparison.
We qualify people all the time with the old home “retained as a rental.” You can use market rent for your area to offset the mortgage on the existing home to keep your ratios down. You are running the risk that you will end up responsible for two mortgage payments if you can’t sell your current home quickly enough. In my area, that’s not a problem because the market is hot (that’s why no seller will accept a buyer’s offer if it’s contingent on selling the current residence… there are so many buyers out there that they don’t have to.)
Pros and cons as usual.. Weigh everything. Better you seek a consultant, a friend who is more educated on these area. I am not.. I am just here to give advice to you.. I am just a poor workaholic guy. God bless.
One way to avoid a home sale contingency is to talk with your bank or financial person BEFORE you list your home and get a home equity loan. The closing costs are lower than with a bridge loan but you cannot get a home equity loan if your house is already listing or has been on the market in the last few months.