Buying a new home and selling an existing home at the same time has it's own set of challenges. But with planning, you can ensure everything goes smoothly.
Before putting your house on the market or committing to buying a new one, take a look at the prices of houses in the areas where you'll be both selling and buying. You'll need a realistic idea of sales prices for similar houses so you can assess both your buying and selling position.
What if you're unable to perfectly time the sale of one house with the purchase of another? You may own no houses for a time, in which case you'll need money in the bank and a temporary place to live. Or, you may own two houses at once. That's why it's important to have a back-up plan. Here are some options to consider:
Many people see buying a second home as an investment opportunity. You'll need to identify sources for your down payment, since you're not selling your current house and using the proceeds, and you'll need to expect a larger monthly obligation for housing expenses.
Keep in mind that if you declare it as a rental, your mortgage might be slightly higher. Work with your lender to create a customized loan program with the best combination of rate, points, and closing costs for your needs.
Before putting your house on the market or committing to buying a new one, take a look at the prices of houses in the areas where you'll be both selling and buying. You'll need a realistic idea of sales prices for similar houses so you can assess both your buying and selling position.
What if you're unable to perfectly time the sale of one house with the purchase of another? You may own no houses for a time, in which case you'll need money in the bank and a temporary place to live. Or, you may own two houses at once. That's why it's important to have a back-up plan. Here are some options to consider:
- Research short-term rental and storage options (family, friends, storage facilities, containers).
- Bridge financing is a short-term loan for the down payment on a new home backed by the equity in your old house.
Buying a Second Home
Buying a second home isn't that different from buying a first home. Affording it usually depends on your ability to qualify for a mortgage on the second home. Benefits include a getaway for the family on vacations or holidays, a future retirement home, renters making your mortgage payments for you, or an investment.Many people see buying a second home as an investment opportunity. You'll need to identify sources for your down payment, since you're not selling your current house and using the proceeds, and you'll need to expect a larger monthly obligation for housing expenses.
Keep in mind that if you declare it as a rental, your mortgage might be slightly higher. Work with your lender to create a customized loan program with the best combination of rate, points, and closing costs for your needs.
