What’s The Best Way To Buy a Home Before Selling?

By Richard Warner

I have been an investor and landlord for 5 years. When I got my official real estate license, I started as a First Time Homebuyer Specialist and have since received specialization certifications in Luxury Homes, Probate, and Divorce.

If you find yourself in the exciting yet daunting position of wanting to sell your current home to move into a new one, you might be grappling with various concerns. One common worry is bridging the gap between selling your current house and buying a new one. The good news is you’re not alone in this dilemma; there are viable solutions to explore. Your equity can be leveraged to facilitate your transition to a new home.

1. Home equity line of credit. A HELOC lets you tap into your home’s equity without selling it first. Typically, lenders permit borrowers to access up to 85% of their home’s equity. While securing a HELOC may take longer than a traditional mortgage, having it in place before house hunting is advisable. Once you’ve moved into your new home, you can repay the HELOC using the proceeds from selling your old house.

2. Bridge loan. A bridge loan is a short-term financing option that utilizes your home’s equity as collateral. With a bridge loan, you can borrow up to 80% of the combined value of your old and new homes. Although bridge loans often boast faster approval times than HELOCs, they tend to carry higher interest rates and necessitate excellent credit. Additionally, you’ll need to expedite the selling process of your old home to repay the bridge loan promptly.

3. A third-party buying service. Third-party buying services like HomeLife offer an alternative route to expedite your home-buying process. These companies make cash offers on your behalf for the new home you desire, facilitating a swift transaction for the seller. This means you can move into your new home without the typical delays associated with mortgage financing. Subsequently, you can sell your old home at your convenience and repurchase the new home from the buying service. However, it’s crucial to note that such services often entail additional fees.

Ultimately, the best option for you depends on your unique circumstances and preferences. If you’re uncertain about which path to pursue, don’t hesitate to reach out. We can provide tailored advice based on your situation. With the right approach, you can confidently navigate the transition from your old home to your new one. We look forward to hearing from you.