krista4
Footballguy
Thanks @krista4What's the process for buying then selling?
Own existing outright, want to new home at a comparable price. Want to be closing on the new house before putting the old one the market so we have a place to live and can move from one to the other as seamlessly as possible.
Not thrilled about the interest rates of having a temporary loan while the old house sells. Not thrilled about liquidating investments for a down payment either. Would you need the full 20% down? HELOC? Bridge loan?
I've done this several times in exactly the same position (own existing home outright) and am going to do it again in the next year. Kind of a pain, and interest rates aren't good right now, but I did a HELOC in each case and borrowed on that plus added cash on hand so that I could give a cash offer on the new one. That's been necessary for a while here in order to have any chance of winning the bidding wars. Next move is to Chicago, where the market isn't hot, so maybe there would be other options. I looked at a bridge loan once and honestly can't remember why I ruled that out.
I'll be curious if others have ideas. @Chadstroma might also be a resource in that regard.
The most common approach is to put in offers with a contingent upon sale in it. This eliminates the need for anything other than a normal mortgage and you can use the proceeds to buy the new home. Depending on your market, this may be perfectly normal and accepted (slow to balanced or warm markets) when there is not a lot of competition for the real estate on the market.
If putting a contingency is not really an option as it will put you at too much of a disadvantage in a competitive market, then a bridge loan is usually the route to go here. To simplify it, you are simply using the equity in the current home to with a short term loan secured by the old home. The typical hang up is that most lenders require you to be able to qualify while holding both loans though I believe I have a lender now that does not require that anymore (would need to double check that and make sure it wasn't a dream after losing a deal last summer because none of our lenders would do it without them being able to qualify while carrying both homes).
You can do an equity loan/line. You usually can not do the equity with the property listed (and most lenders I have known in my past had a 6 month seasoning after taking it off market) so you would want to set it up before listing your home. Most equity loans/lines will offer no costs on them but with a pre-payment penalty for a few years. The costs are usually going to be somewhere around $500ish (unless things have changed a ton since I use to be involved in equity lending a lot).
If you want to dig into you situation in more detail, I am happy to assist. I am licensed in about 13 states and my brokerage is licensed in 48 so if not one of the states I am not licensed in, I can either potentially add it quickly or if not, refer to one of my colleagues to take care of the loans. For the two states that we are not, I know brokers that I can refer you to. For equity, we do them but if you just need a vanilla one, you are better off finding a small community bank or credit union and get it through them as their pricing will be better than what I can offer. The times I do equity loans/lines if when the banks/CU's won't do them (need a higher LTV, higher DTI, low credit, etc). I have helped more than a couple of FBG's either personally or by referring to others.
You're amazing as always.
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