If you’ve found a home you want to buy, but your current home hasn’t sold yet, don’t fret—you do have options:
Carry two mortgages for a short period of time. Although this is probably the most common route that people take when they’ve found a home to buy but haven’t sold their current home, it may be the riskiest as well. Although paying two mortgages may not be a problem for you for a month or two, anything longer than that may put you in the danger zone financially. Also, there’s always the possibility that your home may not sell quickly or a pending sale may fall through.
Delay the date of your closing. You may have a little wiggle room with the seller of the home you’re buying and your lender. Instead of making your purchase contingent on the sale of your current home—which may be a turn off to a seller—you may be able to negotiate a slightly later closing date and gain a little more time to sell your current home. Keep in mind that many sellers are also trying to buy a home, so they may have time constraints of their own and may need to close by a certain date.
Get a bridge loan to “bridge” the gap. Basically, a bridge loan is a short-term financing option that uses your current home’s equity to help you secure your new home. You’ll use the funds from the bridge loan to put a down payment on your new home and then repay the bridge loan once you sell your current home. Be aware, however, that bridge loans have different fees, rates and terms (as opposed to conventional financing), so be sure to discuss your options with your mortgage broker or lender.
In the end, although buying and selling in a relatively narrow timeframe can certainly be challenging, if you know what your options are, you’ll be much more likely to be successful.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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