Buy and Sell Homes Simultaneously
The home buying process is a complicated one, even in the best of times. However, it can take on an entirely different level of complexity when you’re buying a new home while trying to sell your existing one at the same time.
In this section, we will discuss how buying and selling homes simultaneously works, what challenges may arise during the process, and we will also provide tips on how to make both processes easier.
With the right advice and planning, you can successfully buy and sell homes simultaneously. You just need to familiarize yourself with the current market rates and house prices in your locality. This will allow you to assess your buying and selling positions and also help you understand your options.
What happens if you aren't able to buy and sell your houses simultaneously?
You may be faced with the situation where you own no properties at all, in which case you’ll need money in the bank as well as a temporary place to live. Or, you might own two properties at once. That’s why you require a backup plan.
The following are some options you may consider:
- Bridge financing – Take a short-term loan in order to pay the down payment on the new home, backed by the equity in your old house.
- Research short-term rental and storage options – this could include checking with your family, friends, storage facilities, or renting a container.
Owning Two Homes: The Pros & Cons
The process of buying a second home is very similar to buying the first one. However, affording it depends on your ability to qualify for a mortgage.
The benefits of having a second home include:
- Having a holiday getaway for family vacations
- It can be a future retirement home
- Or you can rent it out and use the income to pay your mortgage payments
Keep in mind, if you declare your second home as a rental, you may need to pay a slightly higher down payment and mortgage. Therefore, make sure to work closely with your lender to create a customized loan program with a combination of rate, points, and closing costs that is most convenient for you.
While a second home can be a great investment, try and make the most out of the opportunity at hand. Make sure to factor in the sources of your monthly expenses and down payment (don’t forget to factor in the costs of maintaining the property)!