How do I avoid two mortgages?

Question

My spouse and I currently own a home. We want to build another home on family land. Are there any programs we can use to avoid two mortgages? We cannot afford two mortgages and don't want to have to sell our home, move into a rental, then move again. Any advice is appreciated.

We are also expecting a child in three months...further reason for not wanting to move twice. The leaseback option sounds like something we will look into.

Answer 1

You can mortgage your present house for enough to pay for the second house with cash. But you can not have one mortgage for two separate addresses.

Answer 2

You have a couple options here. First off, you can put your house on the market, sell it and do what is called a "lease back." This is when the buyer agrees to let you stay in the home for a given time but you pay them rent. That way you don't have to move until your new home is ready. It is very common and you will be surprised at how easy it is. Another option is to list the home with a realtor that will buy your home from you if it doesn't sell. There are a few out there like ERA that have programs such as this. In the real estate business, one of the biggest challenges is timing. Ask yourself this...Am I buying/building this new home because I won't have to move twice, or am I building this new home because it is what I want to do and what is best for me right now. In other words, put things into perspective. What's the big deal in the long run if you have to move twice? In the grand sceme of things, you'll be happy you live in your new home. Also, check into what is called a "construction loan." This is the same type of financing a custome home builder would use. Check into it.

Answer 3

You will only qualify for two mortgages if you can afford two mortgages. You cannot build a new home without a source of money. Contractors and suppliers really frown on that. If you cannot handle two mortgages, then you're going to have to sell your home before you start the new one. And that probably means moving into a rental somewhere unless you can convince the buyers to let you rent back until your new house is completed. Most buyers don't go for that.

Answer 4

You can get what is called a bridge loan from the bank. It is short term loan to build or buy a new house while you wait to sell the one you currently live in. It would still be two payments but for a short period of time.

Answer 5

The only thing that comes to mind would be to try and use any equity you have in your existing home to refinance your primary and then take the cash to fund the 2nd house. Short of that, save you money until you can afford to build outright.