Why Buying a New Home Before You Sell Your Current Home May Be A Great Idea | Affiliate Contributor

One of the biggest transitions you can make in life is the one between selling your current home and buying a new home. It’s packed with stress, difficult decisions and financial advice that’s going to boggle the mind. 

Every single timeline of every real estate transaction differs, so trying to close on one house and buy a new one at the same time can be difficult. Thankfully, with the help of things such as delayed financing it doesn’t have to be an impossible task. You might be wondering whether you should buy a new home before your existing one sells, but this one doesn’t have a clear yes or no answer. Instead, you should look at weighing up the pros and cons of both before you make a choice. Let’s take a look at those below.

Pros

There are plenty of pros to buying a house while you are selling your current one. If you plan to remodel the new house, the home you currently live in provides you with somewhere to live while you work on it. This gives you time before you have to sell it and then move into the new place. You also get the time to make updates to existing homes which will help you to attract buyers. Of course, this depends on your budget. While selling your current home quickly is a good thing, you would have to find somewhere temporary to live, and if you haven’t found a home that you like buying a new home before your current one has sold allows you to avoid awkward interim and the hassle of having to move twice.

Cons

The biggest disadvantage of owning two houses at once comes down to financing. We already talked about delayed finance, but they still have to pay bills and mortgages on two properties which can really drain your bank. Obtaining 2 mortgages may also not be possible. This depends on your debt to income ratio. Speaking to your lender or mortgage broker about this first is a smart idea and you shouldn’t do this without some advice. Some lenders require you to pay off the first mortgage before you qualify for a second one which would be a big con because you need to have delayed financing or a bridge loan in situations like this. Home equity loans can function similarly to a bridge loan, but they have a longer loan term.

There are plenty of other things you have to consider as well, because while you need to buy a new house while you sell your current one, it might not always be possible. You have to think about the condition of your current house and how much you need to do to get it ready for other people to move in, and you have to think about whether it’s ready to sell. You might also decide to rent out your current property while you buy a new one and it can be a good source of income but it can be a headache. Not everybody wants to be a landlord because it’s a heavy responsibility.

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