Do I need to sell my home before I buy another?
Deciding whether you should buy a new home or sell your current house first? HOLD UP – the real first step is to get in touch with a reputable lender. Don’t worry - if you need a lender your realtor will be able to provide you with a list of great options to get started.
Deciding on how to purchase your new home (before or after you sell), should be based on your finances. Once you know your spending limit and how you’re going to finance your home, you can consider other factors such as:
Moving timeline
Market conditions.
House goals
Here is a deeper dive into the pros and cons of each option:
Selling BEFORE You Buy:
Selling your house before buying a new one is the more practical solution for most people, but it’s not always the most convenient. Selling first is beneficial if you need to access your current home equity to buy your new home. However, selling first often requires temporary housing while buying your new house in Mason.
Pros:
Avoid a rushed home sale
Make a stronger purchase offer
Know your sale profit
Pay only one mortgage
Stage your own home
Cons:
Rushed home purchase
Cost of temporary housing
Burden of moving twice
Tips:
Having a great lender can make a big difference as you’re considering your options. Make sure to leverage their expertise and explore different possibilities that you may have.
Buying BEFORE You Sell:
If you have the financial security to own two homes at once, then buying first is a convenient option that avoids multiple moves. However, the financial strain can cause you to rush through your home sale, possibly making more concessions than you would otherwise.
Pros:
Avoid a rushed home purchase
Secure the home you love
Control your moving timeline
Only move once
Cons:
Rushed home sale
The financial strain of two mortgages
TIPS
Apply for a bridge loan or home equity line of credit: If you’re interested in buying before selling but need to maximize cash flow, you could take out a temporary bridge loan or a Home Equity Line of Credit (HELOC) to pay for your new down payment.
Consider leasing your home: If money gets tight, you can always rent your home and wait for market conditions to improve.
