How to Buy a Home Before Selling Yours.

In an ideal world, the timing of buying your dream home and selling your current home lines up perfectly and you can seamlessly make the transition in a short period of time. But unfortunately, in reality the process is typically much more complicated than this and homeowners can be left feeling confused and overwhelmed about navigating the timing of buying a new home before your current home is sold.

In today’s market with very low inventory, sellers do not have to accept an offer subject to you selling your current home, because they will most likely have other offers. This can make the entire process more tricky, but definitely still doable. Here are a few way you can buy a home before selling yours:

1. Make use of a bridge loan. Bridge loans (also known as swing loans) are designed to provide a transitional period, such as moving from one house to another. Bridge loans are often secured by your current home as collateral. This can be a helpful option for someone who is ready to make an offer on their dream home, but doesn’t yet have access to the funds from their current home’s sale. 
2. Use a line of credit or home equity loan. Another great financing option for those who are buying a home before selling theirs is a HELOC (home equity line of credit). This is a loan that’s secured by the equity of your current home, allowing you to make a down payment before you have a contract on your current home. You’ll just need to pay this off along with your old mortgage when your old home sells. 
3. Get a pre-approval for a second mortgage until your initial home is sold. You can apply for a second mortgage with the bank until your first home is sold. I always tell my clients that the key is to ensure your house is ready for the market and all repairs are completed so you can sell it quickly and be done with the first home’s mortgage!

Of course, each person’s financial situation and real estate goals are unique, so the option that works best for one client just may not be ideal for the next. Because today’s market is so complex, please reach out to me about more details and any questions you may have! If you are unsure and uneasy, I’d love to help put your mind at ease as you “unlock new doors”!