You’ve already successfully bought your first house, enjoyed a few years in it, and now you’re ready to move onto your next home. You’re what we like to call move-up buyers here at Mortgage Specialists.
Since you’ve already purchased one home, you’re familiar with the process. That alone is a huge stress relief. The bad news is that now you have a house to sell while you’re buying a new one. So how does that work?
Well, luckily we’ve been through this process thousands of times. We can offer some insight to our move-up buyers about buying and selling at the same time.
Buying and Selling at the Same Time
Ideally, you would find your dream home, put in an offer, and then deal with selling your current home. The only problem is that for an unknown period of time you’re stuck paying two mortgages. Not everyone has the finances or desire to do that.
Instead, we recommend that you get preapproved for a loan and begin looking at homes. If there are a few homes on the market that interest you, you have two options.
First, you can put an offer in on a home but make it contingent on the sale of your home. This means that you will wait to close on the new home until you’ve sold your current home. This option may seem too good to be true and that’s because in some ways it is. Many sellers won’t accept contingency offers, so while you may put the offer in, there’s still a chance the seller won’t accept.
Second, you can do it all at once. That’s right, you can be house hunting and selling your current house at the same time. With great coordination between the real estate agents and lender, and a little luck, you may just sell your home and close on a new one on the same day.
If neither of those options work for you, you can always purchase a new house and sell your existing home afterwards. While you would need to be able to qualify for the new loan in addition to your existing loan and have the money to cover closing, this is a great option during a seller’s market. We’ve found that past move-up buyers really appreciate not being rushed to pack up and clean their existing homes.
Gauge the Market
Whether it’s a seller’s market or a buyer’s market, you’re in luck! Since you’re buying and selling, the market is always going to be in your favor. We recommend you gauge the market to know whether it’s going to be harder to sell your existing home or purchase a new one.
For example, if it’s a buyer’s market, you might want to list your home for sale before making any offers. Since it’s a buyer’s market, there are likely a lot of homes for sale and it might be harder to sell your home than it is to find a new one.
Consider the Money
This one is a big one – you need to make sure you have money on hand for both purchasing and selling your home, and to qualify for both house payments. For purchasing a home, you need to have the funds for an earnest deposit and all of the prepaid costs, such as property taxes, homeowner’s insurance, and mortgage interest. For selling your home, you need to make sure you have enough money for any necessary repairs or to spruce up your home with a new coat of paint.
Before you begin to panic, give us a call at (402) 991-5153 to talk through your options as a move-up buyer. We’re available anytime, day or night for our clients! We can take your financial situation into consideration, as well as the current market, and give you advice on how to go about moving up into your next home.
Ready to start the mortgage process? Our online application takes anywhere from 5-20 minutes to complete. Once it’s submitted, we can have you pre-approved for a loan in just a few hours.