Should You Sell or Buy First?
You're in the market for a new home while actively trying to sell your current home, should you buy your new home first or wait until you sell your current home? Use these tips to help you have a smoother transition from your old home to your new home.
Learn what happens in each instance, and how to coordinate your transition.
If you’re buying a home while selling your current house, there’s a good chance your closing dates won’t exactly align. How can you deal with selling your home before buying a new one, or vice versa?
Here Are Some Ideas:
If You Buy a Home Before Selling Your Current One:
The good news is you’ll immediately have a place to move into, but you may not have enough money saved for the down payment for the new ones. Some options:
- Tap into savings. Utilize money from savings or non-retirement investments, immediately replacing it once your home sells.
- Rent your existing home. Use the rent to go toward your old mortgage. With this option, you will still need money for the down payment of your new home.
- Add a sale and settlement contingency to your contract. This states you can’t close on the new house until the current house sells. If you come away with money from your home sale, you could put it toward your down payment.
If You Sell Your Home Before Buying a New One:
You’ll know how much you have for a down payment, and it may be easier to qualify for a new mortgage since you’re not carrying debt from your old home. But selling first means you may not have anywhere to live after closing. Some options:
- Stay with family or friends or rent an apartment.
- Rent-back agreement. You’d negotiate and pay rent to the new owners in order to stay in your home. However, there may be liability issues involved so you may want to discuss this option with an attorney.
Ready to buy or refinance a home? Contact the loan officers at the Union Plus Mortgage Company, a union-owned company for all your home financing needs.
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