The Mortgage Corner with GreenState Credit Union: The Process of Buying & Selling a Home at the Same Time
Buying or selling a home can be stressful. It's not just about finding the perfect property to move into or finding the right buyer for your current home; it's about timing it right, qualifying for loans, and managing finances. And when these two significant life events happen simultaneously, the stress can be overwhelming. But don't fret. With the right preparation and guidance, you can navigate through this process smoothly. Here are a few tips to think about as you consider your next home purchase.
Getting Your Finances in Order
The first step in this journey is to get your finances in order. This includes understanding your current financial situation and how it will affect your ability to buy a new home and sell your current one. It would be best if you considered your credit score, your savings, your current home's equity, and your debt-to-income ratio. This information will be crucial when applying for a mortgage for your new home and when setting a competitive price for your current home.
Having a Timeline, But Being Flexible
Time management is crucial when buying and selling a home at the same time. You need to have a timeline for when you want to sell your current home and when you want to move into your new one. However, it's important to remember that the real estate market can be unpredictable. Therefore, while it's good to have a timeline, it's equally important to be flexible. You might need to adjust your plans based on how quickly your current home sells or how long it takes to close on your new home.
Considering a Sale Contingency
A sale contingency can be a lifesaver when buying and selling a home simultaneously. This is a clause that you can include in your contract that gives you the right to back out of the purchase of a new home if you can't sell your current one. This can protect you from being stuck with two mortgage payments if your current home doesn't sell as quickly as you hoped. Be sure you obtain guidance from our trusted Realtor partners about this option.
Exploring the Option of a Bridge Loan
If you find yourself in a position where you need to buy a new home before selling your current one, a bridge loan might be an option worth considering. This is a short-term loan that you can use to cover the down payment on your new home. Once your current home sells, you use the proceeds to pay off the bridge loan. However, it's important to talk to your lender about this option and understand the terms and conditions before you proceed.
Buying and selling a home simultaneously can be a challenging task, but with the right preparation and guidance, it can be a smooth and successful journey. Having a wonderful Oakridge Realtor and GreenState Credit Union lending partner to guide you through all your options is extremely important.