How To Buy A Home Before You Sell Your Current Home

The Modern Way to Buy A Home Before Selling Your Current Home

The Richard Woodward Team makes home buying stress-free. Never miss out on a great home because you haven’t sold your current one.

The Modern Bridge Loan Program we offer puts you in a much better buying position.  Until now, you had to sell your current home before you could buy a new one. Today, you’ve got a better option. Buy before you sell gives you the power of a cash offer and helps you avoid the uncertainty of the traditional real estate transaction.  The Richard Woodward Team will pre-approve you for the purchase of your new home upfront, once approved, our partner will buy your home for you in as little as 15 days with cash.

Instead of paying closing cost for this transaction, you pay a 2% of the purchase price fee at the closing of your new home.  You will lease the home back from our partner at a predetermined daily amount and move in right away.  Once you have sold your old home, The Richard Woodward Team will provide you the financing needed to purchase the home back from our partner at the original sales price.   Click here to view the details. RIBBON_OVERVIEW

Become a Cash Buyer.  Leave the bidding wars behind. Stand out to sellers and win your next home with an all-cash offer.

Reasons to buy before you sell with the Modern Bridge Loan Program

Benefits of purchasing a home before you sell your current home

Although it is less common to buy before you sell, it can still be beneficial if your financial resources allow it. These are the top benefits of buying first.

It’s time to find the perfect home

Focusing on one transaction at a given time allows you to buy first. You don’t have to rush through the process of selling a house before you buy a new one. Instead, find the perfect home first, then take your time moving, fixing up, and selling your old home for top dollar.

Remodeling the new house is a good idea.

You can still live in your old home, so you can spend time remodeling or customizing your new home, rather than moving into a construction zone.

Possibility to stage your existing home

You won’t have to worry about making your current home perfect first if you already have a place to call home. You can sell your home faster by making repairs, painting, or completing small upgrades. staging using tasteful decor will help you do this. The Real Estate Staging Association states that unstaged homes can stay on the market for an average of 184 consecutive days before being sold. Homes that were staged before listing sold in 23 days, which is 8 times faster than homes that were not staged.

Do not buy with a contingent deal

You can buy your new home before you list your old home. This allows you to treat them as separate transactions, just like you would with a vacation property or rental property. You can avoid having to submit a contingent purchase offer. It will likely be rejected anyway in this market. A contingent offer tells the seller you will only be able to buy their home if your home sells first. A contingency is a bad idea in a competitive market. Sellers would prefer to work with buyers who can close quickly without complications.

Reduce interim costs

There will be no additional costs for temporary housing. These costs can include professional movers, storage and rent.  Besides, who wants to move twice?

Is it cost-effective to buy a new house before selling your old one?

It can be cheaper to buy a home first if you have the funds, or you can take out a second mortgage and are currently in a seller’s market where houses sell quickly. Your liquid savings, your income and how you plan on financing the second home are all important.  We can pre-approve you so it takes the stress of the unknown out of your mind.

By using our modern bridge loan option, you don’t have two sets of closing costs and a double move.  It is much less expensive and way more cost-effective.

You are eligible for an additional mortgage

Although there is no prohibition against buying a new house before you sell your existing home, it is a good idea to make sure that you are eligible for a mortgage.

The lender will calculate your debt to income ratio when you apply for a mortgage. This is your monthly total debt obligation compared with your income. Lenders typically require that your monthly debt obligations not exceed 43% of your gross annual income. It is possible to be denied a second loan if you have a mortgage on your primary home.  It will boil down to are you able to carry two mortgages unless you take advantage of our Modern Bridge Loan Program.

Finance the down payment

A lot of sellers use the proceeds of the sale of their home to finance the purchase of their new house. This can be done by selling their first property or by adding a home sale clause in the purchase contract. If you want to purchase first without selling your home, you will need to be creative in how you pay your down payment.

Standard conventional loans require at least 5% down payment. However, some lenders may require as much as 50% to keep your debt to income level low enough. These are the most common methods people use to get the cash they need for their down payment.

Retirement funds

Although borrowing a loan that is backed by your 401k may be an option, the IRS has restrictions on how much you are allowed to borrow. The maximum amount you are allowed to borrow is $50,000.

Your first step should be to consult your financial advisor or tax professional about IRS restrictions and tax implications.

Refinance with cash-out

A cash-out refinance is when you refinance your house into a new loan. However, you borrow more money than you currently owe. This allows you to withdraw some equity that you have accumulated without the need to sell. A cash-out refinance is just like any other refinance. It can be expensive and you will have to pay closing costs.

Home equity line credit (HELOC).

A home equity credit is a revolving credit line that is secured by your home’s equity. You may not be eligible for a HELOC if your house is already up for sale. Be aware of fees if you choose this route.

A financial gift from a family member or friend

A family member can make a down payment, but it must not be considered a loan. You will need to inform your lender. You may not be able to pay the full down payment using a gift from some lenders. Check with your mortgage broker. Make sure that the recipient of the gift is well-aware of tax implications. Financial gifts exceeding a certain amount are subject to tax.

Tips to buy a house before you sell it

To avoid having to pay two mortgages over a long period of time, it’s important to sell your home once you have purchased your new home. These are some tips.

Calculate the time it will take for your product to be sold

The time it takes to sell your house will depend on the real estate market in your area, but you can expect it to remain on the market for at least a few weeks. The closing process takes on average 30-45 days. You’ll be responsible to pay the mortgage during this time, from the closing date onwards.

Rent instead of selling

Renting is usually faster than selling your home. If you are looking to reduce your monthly mortgage payments and save money, you might consider renting. If you are planning on selling your home in the near future, you can offer a month-to-month or short-term lease.