Selling and Buying at the Same Time? Here’s How to Survive

If you aren’t a first-time homebuyer, chances are good that you’re going to be buying a home at the same time you’re selling your current one. Juggling these tasks simultaneously seems overwhelming, but it doesn’t have to be if you’re prepared. Here are some key questions to answer to survive selling and buying homes at the same time.

Should You Sell First?

Unless you can afford to make two house payments indefinitely, you’ll probably need to sell your current place first. An advantage of selling your home first is that it frees up cash for the purchase of your new home. The downside is that, well, you won’t have a house to live in! If you’re up for storing your belonging and living at a friend’s or in an apartment, selling first may be your best option.

Can Transactions Be Done Simultaneously?

Technically, yes, a person can sell their home while buying one. This only works if you have enough credit to qualify for two mortgage loans. If your current home isn’t paid off, you would need to be able to continue paying for it and then qualify for another mortgage on the second home. Most people can’t swing that.

You could also buy the new home on contingency. This means you write into the offer that your offer to purchase the property hinges on you being able to sell you current home. Beware that in a hot buyer’s market, most sellers won’t consider doing this. They’d rather have a “sure thing” than a contingency.

What If I Need a Loan for the Second Home?

You will need to get approved for a mortgage loan for the second home just like you did with your current home. Talk to a loan officer about which loan is right for you. You still have many choices from FHA loans to conventions loans, and from fixed rates to variable. And, as mentioned above, you may have to sell your current home to qualify.

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Can You Have Two Mortgage at Once?

Only if you can afford it. If you can raise a down payment and get approved for a mortgage on the second home, you can keep your mortgage on the first one and sell it when you find a buyer. For most people, two mortgages aren’t possible financially.

You might consider a bridge loan. This is a short-term loan that covers the time you close on your second home until you sell your first home. This option allows you to buy a home while selling your current one. It’s conditional on you selling your home, at which time you repay the bridge loan.

Selling a home while you’re buying another one can cause stress and big headaches if you aren’t prepared. Do your research and find an experienced real estate agent to help you navigate the process. And, as with any mortgage need, call MIG today to speak with one of our experienced loan officers so you can understand and weigh your options. Advanced planning is the best way to successfully buy and sell at the same time.

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