If you’re buying a home while selling your home at the same time, you’re going to undergo a specific set of challenges. Most people hope to sell their home first and then search for a new home. However, this often doesn’t work out, leaving homeowners stuck with how to finance their new home purchase. If you’re in this position, here’s what you can do:
The first thing you can do is to get pre-approved for your new home. You’ll have to explain to your lender that you still currently own a home, and they will hopefully calculate a projected debt-to-income ratio so you can still pre-qualify for the home. Because two mortgages against one income are typically not affordable, you will have to settle for the pre-approval and wait for the actual approval until you have sold your home.
Hire a real estate agent.
The main goal when buying a home while selling is to make sure there’s a limited amount of time between the old house and the new house. Otherwise, you’re going to have to pay for temporary housing and any incurred living expenses. Hiring a professional real estate agent will allow you to decrease that gap and get into your new house faster.
When you sell a house, you will usually be released from ownership within two weeks. However, if you’re in a bit of a bind, you can request that the seller of your new home release the ownership to you at the same time you do to the buyer of your home. This will allow you to save a little bit of money and free up your debt-to-income ratio. Just remember that you will have had to be approved before you can close the deal.