Financing a New Home Before Your Current Home Sells ~ What options do you have?
Bridging the Gap.
The past few months have brought 3 different client situations where someone needed to purchase a home before theirs sold and they were unable to just get a contract with a sale contingency.
Our clients have handled it two different ways. Two of our clients had enough money in CD's to purchase the new home but the CD was not at maturity. Cashing it in before maturity caused a penalty that they did not want to pay. Both of these clients were able to borrow funds against their CD at a very good rate, buy their new home, get moved, and then pay off the CD loan when theirs sold without having to make monthly payments on the borrowed money.
Another Client was able to make the mortgages payments on both properties... their current residence and the one that they were purchasing, but their down payment was going to come from the sale of their current home. They had enough equity in their current residence for the purchase of the new home. SO they got a mortgage with both homes on the same mortgage and then when they sold their current residence, they paid that sum on the mortgage. This allowed the sale of their home to reduce the mortgage on the new home by enough to still fit the guidelines for a conventional mortgage.
In the past, I've had clients that lived in the country, on a farm, and it was time to change lifestyles and move to town. Getting older caused them to want to downsize, relocate close to medical facilities and more secure. They were able to sell their cattle for enough to make the purchase, get moved, and then sell the farm.
Some assets are more liquid than others... cattle can be liquidated in a fairly short period of time.. Some assets are readily accepted as collateral such as CD's. And some assets can be combined with a new home purchase on a loan to collateralize the down payment. It's always a good idea to explore all options when its time to make that move so you can make the move that your current situation in life is calling for.
When its time to buy or sell a home, call me. I would love to visit with you about it. Judi Barrett at Integrity Real Estate Services Idabel, OK 74745. 580-212-5946