Do you dream of having a new house while your current one is still on the market? If so, you may be stuck, wondering how on earth you can purchase a new property without selling the old one. Well, you are not alone. Many individuals get entangled in this problem. And often, it’s tight to wriggle out of such scenarios. Luckily, there are ways around it. The following article discusses some of the tips and tricks for buying another house before selling yours.
Get Pre-Approved for a Mortgage
Get pre-approved for a mortgage even before you start hunting for your new home. It is going to give you an idea of how much money you can afford and also whether you can really carry two mortgages at a time. It also makes the sellers realize the buyer is serious about purchasing the house, and it may be an upper hand in the competitive market.
Consider Bridge Loans
If you are in a position financially, you can look at bridge loans as an alternative way to buy another house before selling the current one. This is a short-term loan which you can take to enable you pay the down payment on a new home as well as the closing costs. These loans often have slightly higher interest rates and fees, but they alleviate the stress of holding two mortgages at once.
Rent Out Your Current Home
Unless you’re ready to sell your current home, you could just rent it out. It can help carry costs associated with two mortgages, and you may even realize a profit in the process. But that takes a little homework so that you’re aware of the issues associated with being a landlord before diving in headfirst.
Negotiate a Rent-Back Agreement
The second is to negotiate a rent-back agreement with the home buyers to sell the home but still live in it for a while longer, typically 30-60 days. This gives you ample time to find and buy a new home, without any pressure.
Make a Contingent Offer
The contingent offer is the offer to buy a new home, which is contingent on the sale of your current home. It means the offer that was made on a new home ceases to be valid if the current house does not sell within a stipulated period. On the other hand, a contingent offer can be a good compromise in case you have found your dream home and really want to make sure that you get it, but it’s very dangerous if the market is competitive.
Get Creative with Financing To Buy Another House Before Selling Yours
If you’re bent on buying another house before selling yours, you will have to be creative about financing. You can explore options such as home equity loans, lines of credit, or even funds from friends and family or crowdfunding. You should consider all your options and weigh the risks against benefits in every decision.
It can be stressful and complicated to buy another house before selling yours, but it is definitely not impossible. With the help of a reputable real estate agent, you can research your options for a solution that works best in your case. Always remember to keep your finances stable and never overcommit yourself in the debt area. Good luck buying a home!
