Need to buy a new house and sell current one?
You and half the population!
But how to you make that jump with a mortgage on each home?
There are several way you can make the transition:
1.Take a Home Equity Loan
-This requires that you first have equity.
– Second, you must qualify to carry the payment on Home Equity loan, current mortgage and the new mortgage. All these payments usually rule it out as an option for most people.
2. Take a ‘Bridge Loan’
Also called ‘Swing Loans’, this is a short term refinance of your current mortgage, which helps in two ways:
-First, you can pull equity out (provided again you have equity) for your down payment and closing costs.
-Second, this reduces the payment on your current home to interest only, in order to make it easier to qualify to pay both mortgages.
The ‘Swing Loan’ is paid off once current home is sold.
3. Go ahead with a new mortgage
– If you have enough income, you may qualify to pay both the current mortgage and the new mortgage. Now, most people have NO desire to pay two mortgages, and that’s okay.
Usually, as long you qualify on paper, you can write the offer on the new home. Sell your current home quickly, and then close on the same day, with NO overlap in payment.
Even with a small overlap in payment, it is usually not a hardship. When selling a home, the amount in your ‘Escrow’ account that is set aside for property taxes every month by your bank, is refunded to you a month after closing. This refund allows you to cover the extra payment for a month or two.
-The other caveat here is that you must have the money for down payment saved. If this is hard to achieve, it is a good time to call on family for a short term loan, to be repaid once current home is sold.
Every situation is unique, and we work with you to help make the decision that fits best.
-Call us, and let’s get started helping you make a House Jump! Call/Text: 717-819-2825