Unpacking The Buying and Selling Process
When looking to upsize, downsize, or right size, the process of buying the new home while selling your current home can come with some logistical questions. It doesn’t have to be a mess of complicated transactions and we are here to shed some light on how you can make the process as easy as possible.
Put a Plan Together
You know you want to move, now what? Whatever your reason for looking for a new home, the process should always start with a meeting with your Mortgage Consultant. They can take a look at your current property value and help you determine what your loan proceeds should look like when you sell your current home. From there, you can look at loan programs for the new home knowing how much you can afford and how much you will have for a down payment. Going into the home search armed with that knowledge is paramount to your success.
Choose How to Make It Happen
When you already own a home and you are looking to buy a new one there are a few ways to go about the transaction. Again, meeting with your Mortgage Consultant will help you decide which path is right for you, but let’s look at a few different choices for the process.
First, you can purchase your new home prior to selling your current one. There are different options for how to do that, but one of the most common is to make an offer on your new home with a contingency added saying that you will not purchase the new property until your current property has sold. That will allow you to take the proceeds from your current home and put them towards the down payment and purchase of the new home. While this has been a pretty standard practice, the changing market conditions can make this more difficult for you to have your offer accepted if there are other buyers making offers without contingencies. It is best to work with your Realtor to determine the current market conditions in your area and if this is a good choice for you.
Second, you could sell your current home prior to finding a new home. This would allow you to go through the process of selling your home and you will know exactly what proceeds you have to work with for the purchase of your new home. This can be helpful in a market where there is an abundance of housing inventory so that you are sure your home will sell prior to your purchase of the new home. A disadvantage to this would be that you will have to find temporary housing while your search for and purchase your new home. For some the process of moving twice is less stressful than the possibility of owning two properties at the same time. Again, working with your financial team will help you determine what you are willing to tolerate, both financially and mentally, during this process.
Another option is working with a bridge loan. A bridge loan is a short term loan that can give you the money you need for your down payment until your current home sells and you pay back the loan from your proceeds. This is a great option in a tight housing market, but there can be challenges so it is best to work closely with your Mortgage Consultant to make sure you can qualify for both loans before making any offers on new homes.
Call Cambria Mortgage
To get started, call Cambria Mortgage at 952-942-0110 or visit CambriaMortgage.com. Our team of experts will provide personal, hometown service with sound advice and impeccable attention to detail at every step of the process.