Tips for buying before you sell your home

Mortgage and Lending with Heartland Bank NMLS 461421

The Central Ohio real estate market (like many others) is hot. If you in the market to purchase a home you have already experienced what I mean.  With multiple offers are common on most properties so buyers are making their 1st offer their best.  If you have a home to sell and want to make an offer contingent on the sale of your existing property the market is even tighter.  Older terminology such as bridge financing, 1st mortgage heloc’s and 80/10/10 purchase loans can assist with this process. 

A bridge loan will allow you to pull equity from your existing home to increase the size of your down payment to eliminate the need for mortgage insurance on the new purchase. Making a strong offer with a larger down payment can strengthen you negotiating power on the new purchase.  There are different types of bridge loans depending on the status of your existing home.  Working with a community banker can walk you through the process.

If you’re not ready to sell your existing home yet a 1st mortgage Line of Credit can offer huge benefits.  Whether you’re waiting for the school year to end or want to complete some upgrades before listing your current home this offers you the flexibility.  A 1st mortgage line of credit can offer you interest only payments on your current property.  This allows you to qualify for a larger purchase loan for the new home and withdraw available equity for the new down payment.  Home equity Lines of Credit are based on a variable interest rate so this is typically recommended as a short term solution. 

Finally an 80/10/10 loan. These are a common way for homebuyers to avoid mortgage insurance with only a 10% down payment.  You would have an 80% loan to value 1st mortgage and a 10% 2nd mortgage when you purchase.  This is a great way to buy a home but if you have equity in your existing home that you are waiting to sell this can also allow you to get the 1st mortgage that best fits your need and the take a no cost line of credit up to 90% of the purchase price.  Once you existing home sells you can pay down the Line of credit with no penalty and still have the right 1st mortgage to meet your needs. 

I enjoy working at a community bank that allows me to offer flexible financing to my clients. Please contact me to discuss these options or any mortgage finance questions you may have.