How can I purchase another home before mine is sold which is paid for?

Answer 1

Please what ever you do, pass on the answer that said anything about a bridge loan. If your first home is paid for it is considered an asset, you will never need a bridge loan for that. If you are going to purchase a new home you only need to consider if you want to put money down.

If you have the money down great, if you don't go 100% only if you think the home is in an area that you anticipate great appreciation. By taking out a 100% loan you only pay closing cost and you can get a 80% first and a 20% second so you don't have to pay PMI, there are also non conforming companies you can find trough a broker that will do 100% one loan and no PMI.

If you have more question fell free to email me I have been a loan officer for 12 years and I have come across many scenarios and I am up on the industry old and new.

Answer 2

Get a bridge loan. That's a loan on the equity in your present home that you can use for down payment and closing costs on your new place. It is not treated as borrowed funds for the purpose of your required investment in your new home. Typically you'd get this from the same lender who is funding your new home's purchase though it is possible to get a stand-alone bridge loan if you expect to realize enough from your old home to pay cash for you new one.

Bridge loans are usually a bit more expensive than a regular home mortgage -- typically 1% - 2% higher. They normally don't require any payments for the first 6 months (the interest is added to the loan balance) and typically only require interest only payments for the next 6 months. This is usually more than enough time to sell your old home. Once it closes, the bridge loan is paid off and you get a check for whatever is left after closing costs are paid.

Answer 3

Not sure if this would help. Usually, a housing market correction last for years. It is unlikely things will brighten up in a few months, afterall, this bubble took 5 years for form.

It might be better to give some discount so you unload the house quickly and can use the gain of the home to make money elsewhere quickly. At the same time, you will save money by not paying mortgage for the next 5 months.

For example, if mortgage is $2500/mo. and you have $300,000 gain sitting in the house, by selling it now rather than 5 months later will save you $12500. It will also earn you as much as $7000 from interests (Assuming CD are paying 5.5% or higher).

Total financial benefit for selling early would be $20,000. I would give buyer some discount just because of that.

Finally, keeping a house in selling condition is a lot of work. If your realtor does staging, it costs extra to rent furnitures. If you are living in the unit, it takes extra effort to keep it clean. So, sell it fast!


http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

Answer 4

You can also keep your home and rent it out to make your monthly payments on your other house. Income property is a good investment if you have a property paid off. Then every month you will get enough income to pay off your mortgage on your new home, still have control of your own home and can depreciate your old home as a rental property.

Answer 5

got out and make an offer on a new home, your already paid the first so no need to worry about two mortgages. why not just rent the first one ? hold unto the first one since the market is not as good right now, and the rent market is picking up.

Answer 6

just buy it. You can own more than one!