So you found your dream home but it’s a fixer-upper that needs some tender love and care. You might consider moving to the new home and living there while you repair it. Is that the only choice you have?
You may consider buying your new home before selling your current property. Yes, you read that right. Selling your property isn’t your only option.
Is Buying Another Property Before Selling Your Current Home the Best Call?
While you may think selling your current home is your only option. You can buy another property to move into before selling yours.
It will come down to the numbers and other major factors. Can you afford to pay two mortgages? Does the new house need any repairs?
If you sell before buying, you may end up having to lease a property for several months or even storage for your belongings. Deciding to buy before selling your home is more complicated than you may think.
You must analyze all angles of the transactions before going for it. Here are the most common questions you should ask yourself when planning to buy a house before you sell.
Can You Afford Buying Another Home?
Buying another home before selling can be quite expensive. If you’re taking a mortgage on your new home, you’ll have to come up with the down payment before selling your home. Most home buyers get these funds from the sale of their current property.
You may use your savings for the down payment. But, will you qualify for the mortgage on your new home? Lenders take a hard look at your income debt ratio to approve your home loan.
If you’re paying the mortgage on your current home, you might have a tough time getting a loan approved on your new home. Also, you should consider any expenses you may incur updating your new home.
Can you afford all these expenses? It’s recommended to visit your mortgage lender and get prequalified if you’re planning on buying a house before selling.
You lender may provide more information regarding the price of the house you can afford. Also, they can provide an estimate of your mortgage payment and interest rates eligibility.
You may consider renting your home instead of selling to afford to buy another property. Leasing your property can help you develop another stream of income and put your property to work for you.
Buying before selling may be your best call if it’s a buyer’s market. Remember these market conditions offer the opportunity to secure your dream home for the best price.
You Decided to Buy Before Selling: Now What?
After learning your pre-qualified amount, you should start house hunting for properties in that price range. You may consider consulting an expert such as our Clever Partner Agents.
A real estate agent can guide you through the process and offer insight about your buying options. Also, your Partner Agent may be open to offering a home buyer rebate. If it’s the first time you hear about home buyer rebates, you should consider asking for one during your buying process.
A home buyer rebate is when an agent offers to give you a portion of the realtor they receive from the seller. You may use this rebate for your closing costs. Keep in mind that your lender must approve it in order to use it.
Should You Consider Selling Before Buying Your New Home?
Selling before buying a new home may be the only option for many homebuyers. It’s difficult to qualify for another mortgage when you’re paying a loan on your current home. If it’s a seller’s market, your house may sell within a week.
When you consider selling your home before buying, you should consult a real estate agent. They can help you list your home to sell it as soon as possible. Keep in mind that our Clever Partner Agents will provide a free Comparative Market Analysis without signing a commitment.
A CMA from an expert can provide you an accurate idea of the home market value of your property. Also, an expert can help you get your property ready and list it at a competitive price.
Listing your property at the right price can help you sell your home fast and get the funds you need for the down payment on your new home. Keep in mind that you may benefit from hiring a real estate agent to handle the situation on the selling and buying sides. Your agent can help you buy your dream home while listing your property or the other way around. It’s your call!