Using Proceeds from Sale to Purchase Next Home?

Question

I would like to purchase a newer home, I have the equity needed to pay for the down and settlement however, I have a question.
How do I use the equity prior to the closing date from the sale of my existing home?
I don't understand the process very well. I wouldn't get the cash until we're at the closing and I need it to close on my new place.
How does this work?

Answer 1

I recently got a bridge loan and it worked out very will. Two months later we closed on our old house and paid off the bridge loan. It was a high interest rate but for a very short loan.

Another way I explored was getting a second lien on my new house that I would pay off when the old house sold. The fees on that were higher but the interest was lower. If I had expected to hold onto the old house longer (like a year or two) I would have gone that way instead.

Answer 2

Most home equity loan lenders will not lend on homes that are listed for sale or that you plan to list for sale. An alternative is called a "Departure Heome Equity Line of Credit". This is a bank portfolio loan so it can be hard to find but what happens is that the bank loans you up to 90% of your equity in the home you are selling so that you can close on your new purchase. They put a second lien against the home you are selling and charge you interest only on the equity line proceeds for up to a year while you sell the house. If you finance your purchase with the same bank there is no charge for the equity line.

Feel free to email me with further questions.

Answer 3

You may inquire about what is commonly called a 'bridge loan', which is a temporary loan to provide you equity to purchase you new house while waiting for the close of the previous. However, you must have sufficient financial ability to pay for this loan, plus your new mortgage, in the event that the buyer of your first property fails to close as agreed.

You may also take out a home equity loan on your first property, but I would advise checking with your lender first to see if doing so might somehow interfere with your mortgage approval on your new mortgage.

Answer 4

It will be a lot cheaper if you can delay the closing on the new home till after your current home sells. I do bridge loans and by experience you will pay between 12-15% during the waiting period. And expect to pay about 1% more for the life of the loan because of the bridge loan

Answer 5

You make an offer on a new house contingent on you selling your current house and then you set up the closing to take place after you close on the first house. This is pretty common. It will work especially well if the same lawyer does the closings on both houses.

Answer 6

I am trying to work out the same deal, but are stil in the beginning phases.

One thing we have found is something called a bridge mortgage. Your lender agrees to fund the new house, but you don't start payments until you old house sells.

Our lender is trying to go more toward getting the seller to wait to close until after our house sells.

It is very complicated right now.

Answer 7

It is possible for you to go to your bank or financier and apply for what is called a bridging loan, or a bridging mortgage to cover the time before both transactions take place,it is designed for that very reason whence thats why it is called a bridging loan...
i hope that helps and good luck in your new home

Answer 8

You close on the sale of your current home. Title company gives you a check for your proceeds. You then start your purchase closing, either at same title company or another one. Give them the check. They apply what's needed for your transaction, and give you another check back for anything left over.

Answer 9

Get Your Answers Here:

http://www.apply4less.com/
&
http://www.proloanz.com/

Answer 10

You would have to borrow it...from a bank or relative until you get your money from the sale.