If you own a home but want to buy another one, this video is for you! We will go over 5 different solutions for buying and selling a home at the same time. Everyone knows the real estate market is very hot right now but no one is addressing how to buy another house while owning a house. It can be tricky buying another house while currently owning a house and a lot of our recommendations will be based on how well you qualify for two mortgages at the same time.
Our first solution is to sell your current home first, move into a rental for a while, and then go house hunting while you are renting. The pro to this scenario is that you will have cash in hand ready to go and you can be flexible while house hunting. The con to this scenario is that you have to move twice and you don’t know where you will end up because your next home hasn’t been identified yet.
Our second solution is to sell your current home first, get the buyer of your home to give you a rent-back, and then go house hunting during the rent back period. The benefit to this scenario is that you don’t move twice. The downside to this is that we have a very narrow window of opportunity since most rent backs are only 60 days long.
The third solution is to secure a bridge loan. A bridge loan will provide you the means to purchase your next home before selling your current one. You need to have a lot of equity in your current home and be able to qualify for two mortgages at once. The downside to this scenario is that typically the lender that gives you a bridge loan will require you to utilize them for the mortgage on your next home.
Our forth solution is to look into new construction options. We love helping clients buy brand new homes and you have 3 different scenarios on how to proceed with new construction. If you qualify for your current mortgage, your new mortgage, and you have the cash available for your down payment without selling then you can write a contract to build a new home, have your home built, move into your new home, and then sell your current one after. If you qualify for both mortgages but you need the cash from the sale of your home before you can close on your new construction home then you would write a contract to build your new home, about 60 days before your new home is completed you would sell your current home and ask the buyer for a rent back, then you would close on your new construction home and move into it during the rent-back . The last option is you can sell first, write a contract to build your next home, and then go rent something while your home is being built.
The fifth solution is to get a home equity line of credit on your current home to use as the downpayment for your next home. You will need to be able to qualify for both your current mortgage, the home equity line of credit, and the new mortgage which might not work for everyone. Make sure that you have enough equity in your home for this plan to work. We recommend at least having a 20% downpayment to be successful in this market.
If you are thinking about any of these scenarios be sure to reach out to us! We need more content for our upcoming episodes of Selling RVA. If you let us document the sale of your home from start to finish for our show, we will reduce our commission by 1%. Reach out here – Taylor@JeffersonGroveRVA.com or 804-357-8490
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Taylor & Sarah Jefferson
Jefferson Grove Real Estate
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11535 Nuckols Rd Suite E
Glen Allen, Va 23059
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