One and Co

One and Co

  • Home
  • About
  • Lifestyle
  • Technology
  • Health
  • Business
  • Travel
  • Blog
  • Contact

May 25, 2020 by Marie

How To Buy a New Home Before Yours Sells

There are many ways to purchase a new house as an investor. For example, you can use hard money loans California, but most hard money lenders expect a high return for their investment, especially if they are private investors. However, when trying to purchase a new home before your house sells, what are your options? Many people need the equity from their home to afford a down payment, and others fear they will get stuck with double mortgages they can’t afford. Thankfully, home sellers and buyers have options for finding funds without the immediate sale of their current residence.

Bridge Loan

Most people need to sell their current residence before buying a new one to free up the equity since the immediate need when looking to buy a house is a down payment. Bridge loans for homes can help with this predicament because it is a short-term loan. However, keep in mind these loans are high-interest and best suited for freeing up funds until your house sells. Never borrow more than you need for the down payment on a house, especially if that sum is higher than the equity of your current home.

Home Equity Line of Credit

If you want to use your home equity before selling it, consider a home equity line of credit. Primarily, you are taking out a second mortgage, but you can use the cash to buy anything. You also have no obligation to use the entire available amount. With this loan type, you will have a draw period to access all or a portion of the equity funds.

401(k)

Many 401(k) plans allow contributors to borrow against their investment, but you will need to check with your plan administrator. The IRS also has guidelines and restrictions in place to protect an individual’s investment. If you wish to fund a new home this way, ask about interest rates, repayment periods and whether personal residence loans are available.

Cash-Out Refinance

Doing a cash-out refinance is like a home equity line of credit, but more advantageous for the borrower. Instead of taking out a secondary lien on their existing property, a refinance pays off the existing mortgage and establishes a new one with the equity included. The borrower can then receive the capital in cash to pay a down payment on a new property.

Sale-Leaseback Contingency

If you have the option to sell before buying or finding a new home, you can use a contingency to protect your interests. A sale-leaseback contingency is an agreement that allows you to sell your current residence, freeing up necessary funds, without having to move. You agree with the buyer to pay so much in rent for a specified term.

Gift

In certain situations, a lender may allow a borrower to use gifted funds for a portion of the down payment. However, while a family gift is excellent, you still need to put up something. Most lenders require buyers to use a minimum of 5% of their own money. If you use a gift, ask about any necessary documents and proof.

You don’t always have to complete the sale of your current home before purchasing new. Contact a bridge loan or other moneylender for more information.

 

About Marie

One and Co is owned by Maria Smith. She is an interior designer with a love for DIY, budgeting and everything home-related. You don't have to be a professional to have an awesomely designed home.

Archives

  • May 2025
  • April 2025
  • March 2025
  • February 2025
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • April 2024
  • February 2024
  • January 2024
  • December 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018

NEWSLETTER

Follow Us Online

  • Facebook
  • Instagram
  • Twitter

Recent Post

  • 3 Tips For Extending the Life of Your Garbage Disposal
  • AI-Powered Semiconductor Reliability Predictions: Detecting Failures Before They Happen
  • Drug Rehabs in Phoenix Arizona: Find the Best Treatment
  • Wide Neck Jars for Natural Products
  • Enhance Your Advertising Strategy with Real-Time Profit Tracking

Facebook

One and Co
  • Home
  • About
  • Lifestyle
  • Technology
  • Health
  • Business
  • Travel
  • Blog
  • Contact

Copyright © 2018 ·one and co