What are your financial options if you need to sell your current home and buy a new one simultaneously?
Have you been thinking of upsizing or downsizing to a new home, but you have concerns about the financial logistics of transitioning from your old house to a new one? Many people find themselves in the tricky position of having to sell their current home and purchase a new one simultaneously, but most aren’t aware that lenders offer several options to help them smoothly accomplish concurrent home purchases and sales. Examples of available options include:
For Buyers Who Have Enough Available Cash to Cover the Downpayment on a New Home
- If the buyer’s current home is on the market but not in contract some lenders are willing to relax debt-to-income ratio requirements to allow the buyer to qualify for a mortgage on the new home before selling the old one.
- If the sale of the buyer’s current home is in contract, and the sale will close within thirty days of closing on the buyer’s new home, some lenders are willing to offer a loan that’s not contingent on the sale of the buyer’s current home.
For Buyers Who Don’t Have Enough Available Cash To Cover the Downpayment on a New Home
- For buyers who can’t qualify to carry mortgages on both their current home and their new home, but have a reasonable amount of equity in their current home, many lenders offer bridge loans. A bridge loan is a short-term loan that is based strictly on the equity in the current home, rather than the buyer’s income and assets. Although the interest rate on bridge loans is typically higher than conventional mortgages, they can be paid off without pre-payment penalties as soon as the sale of the buyer’s current home is completed. Moreover, some lenders offer interest-only options, which typically have lower monthly payments than conventional loans.
If you would like more information on financing options for simultaneously selling your current home and buying a new one, don’t hesitate to contact us! Belluomini | Westhoff Group is happy to connect you with one of our trusted local loan officers in Marin and Sonoma counties, who can provide more information about their offerings and explore available options with you in more detail.