Unlike the experience of buying a first home, when you’re looking to move-up, and already own a home, there are certain factors that can complicate the situation. It’s very important for you to consider these issues before you list your home for sale.
Not only is there the issue of financing to consider, but you also have to sell your present home at exactly the right time in order to avoid either the financial burden of owning two homes or, just as bad, the dilemma of having no place to live during the gap between closings.
Before you start shopping for a home, it’s important to know just how much you can afford. Click here to begin our fast, easy and secure pre-approval process.
Experts , like our loan officers here at BMIC Mortgage, Inc. have some creative financing advice to help move-up buyers get the home they want, without relying on selling the home that they don't want. Homeowners who've experienced rising income since purchasing their first home may actually qualify to carry two mortgages at once. These borrowers should ask us for a pre-approval letter. Such a letter should specifically state that the new home purchase isn't contingent upon the sale of the old home. Presenting this letter with your offer will likely generate a smile and a sigh of relief from the seller.
Qualifying for two mortgages, however, isn't the same thing as making payments on two mortgages. To make things easier, you might consider additional equity financing or a refinance mortgage on the first home. A mortgage refinance will provide for a down payment on the second, and perhaps some extra cash to cover the bills temporarily. If you choose to tap into the equity on your first home with a line of credit, home equity loan, or refinance mortgage, do it before you list the property for sale. Lenders aren't interested in financing a home that's on the market.
Another option is a bridge loan, which provides short-term financing that's usually repaid by a certain date, or upon the occurrence of a specific event. In this case, that event would be the sale of your first home.
Talk with us before you start home shopping. If you have good credit, your we will be motivated to help you develop a financing strategy to make your home purchase go as smoothly as possible.