Purchasing a home now will give you an opportunity to get the lowest mortgage rates in history. You may be thinking of making a transition—to a bigger home, to a retirement home, or to a different neighborhood among other things. And perhaps, you may be wondering if you have to sell your current home in order to buy another.
One Southern California homeowner asks, “I have a $250,000 mortgage balance and I want to purchase a new home. Do I have to sell my current property to qualify for a real estate loan?” That is a great question and the answer is an interesting one.
Do I have to sell my home in order to buy?
The answer is: “yes, no, or maybe”. Here are a few questions you need to ask yourself before you get to a decision:
- Do you want to keep your existing home? The first thing to consider is whether you want to keep your home. And if you do want to keep the property, will the home be a rental? Will the new purchase be a rental?
- Do you have enough money to make a down payment? You should know whether you can afford to make a down payment on another home. If you have enough savings to make a down payment on a new home (and even if you do not), it is important to speak with a mortgage lender or loan officer who can determine whether you will qualify to purchase another home. Lenders have lots of different kinds of mortgage programs at their disposal and can make recommendations based on the prospective borrower’s credit score and income level among other things.
- Would the seller of the home you like participate in a contingency sale? This means that you identify a new home, make an offer subject to the sale of your current home, which needs to be listed for sale. In a fast moving market, many sellers would prefer an offer that is not contingent upon the sale and closing on the buyer’s home.
Note that there is even something called a “bridge loan.” Mortgage lenders can tell you about the program where you are financed for your new home while your other is still on the market.
So, if you are considering the purchase of another home, the best course of action would be to speak with a mortgage lender. If you are in San Diego County and would like the name of a qualified mortgage lender who provides reputable and professional service, just let us know.