Selling your home while buying a new one is a tricky maneuver to pull off. If you sell your home too quickly, you might end up with nowhere to live. If you buy a home before selling your current home, you could get stuck paying two mortgages at once. Here’s how to make the process as easy as possible.
Prepare to Sell
In order to sell your home and simultaneously buy a new one, you need to plan everything out. First, prep your home to be sold. That means cleaning, sprucing up the landscaping and decluttering. Once your home is ready to go, talk with your real estate agent and get pictures taken for the house’s listing.
Prepare to Buy
When your home is ready to sell, it’s time to focus on your pre-buying moves. That means making sure your credit score is as high as possible. At the same time, make sure you have enough cash saved for a down payment. Once you feel confident about your score and your savings, get preapproved for a mortgage. Remember to shop around for the best deal on a mortgage.
As Marketwatch reports, if you’re struggling to find the funds for a new, typical mortgage, you might want to consider a bridge loan. This loan allows you to borrow up to 80 percent of your home’s value to pay off your old mortgage and/or use toward your down payment on the new house. These loans typically only last for a year and carry a slightly higher interest rate than regular mortgages.
Build Your Own Timeline
With all the prep work done, work with your agent to get the timing right. One way to do this is to buy the new home and then list your new home with a settlement date that matches your new home’s closing date. You can also consider a rent-back period if need be. This is where using a trusted real estate agent comes in handy. Trust the pros and you’ll complete this tricky move (pun intended) with ease.
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Original article by Chris O'Shea and adapted in partnership with SavvyMoney.