Buy Now, Sell Later: Qualifying for a New Home Without Selling Your Current One
If you are a current homeowner looking to move, you know the challenges that come with finding a new home while selling your existing one. Avoiding qualification obstacles, contingency chaos, or timing issues that could leave your family with nowhere to live for extended periods of time can seem impossible to execute.
Luckily, there are alternatives worth exploring if qualifying for a new mortgage before selling your current home is becoming an obstacle.
Home Sale Assured
By working with Home Sale Assured, we are proud to offer a way for current homeowners to qualify for a mortgage on their new home without selling first.
Home Sale Assured looks to simplify the customer experience by reducing the friction from the buying and selling process by offering the ability to secure the option, but not the obligation, to sell your home to them. The Guaranteed Backup Contract (GBC) ensures the home remains under contract while providing you the opportunity to accept higher offers and cancel the GBC within 90 days after you close on your new home.
Bridge Loans
Used to “bridge the gap” between your current and future homes, a bridge loan is a short-term product that allows you to buy a new home while still owning the old one.
It’s important to recognize that “bridge loans” can refer to a suite of mortgage products, and the best fit for your needs will depend on several factors, including your financial profile, how quickly you need the funds, and the amount of equity in your current residence. Common solutions include traditional bridge loans, cross-collateralization, a home equity line of credit (HELOC), and opting for increased financing on your new residence.
Piggyback Loans
A piggyback loan combines a larger first mortgage and a smaller second mortgage to help make a home purchase more affordable.
The second mortgage functions as part of your down payment. For example, if you make a 10% cash down payment and take out a 10% second mortgage, you’re effectively putting down 20%. This often leads to lower interest rates and allows you to avoid private mortgage insurance (PMI).
Piggyback loans are often referred to as “80/10/10” loans due to the common structure of the first mortgage accounting for 80% of the home price, the second mortgage accounting for 10% of the home price, and a 10% down payment.
Closing Thoughts
In today’s market, selling your current home may be easy, but buying a new one can certainly present a challenge. Unless you can afford two mortgages at once, coordinating this transition can be exceptionally difficult.
It is possible to sell your old home and buy a new one without facing qualification or timing challenges, and it’s important to become familiar with the differences between each alternative. Reach out to your trusted loan officer to determine if Home Sale Assured or any of the other previously mentioned programs are the best fit for you and your family today.