We are going to be listing our condo as soon as we finish some repairs. We also need to buy a new house.
I’ve found a house which is within our budget but we haven’t even put the condo on the market. We can’t afford two mortgages. So, what are our options? Other than this one house, the only things we can afford are crappy looking trailers. I don’t want to risk losing this house. Will mortgage companies work with homeowners in situations like this to make the transition easier?
To make things more difficult, I can’t talk to the mortgage company because my name isn’t on the loan. But, my fiancee hates talking to customer service people and also works odd hours so he can’t really get in touch with them anyway.
I’m not a real estate broker, but you should have the option of making an offer on the new house that is contingent on selling the existing condo (along with any other contingencies that you might require.) Of course, if the housing market is hot in your area, the seller of that home may balk at such a contingency and sell to another buyer with fewer restrictions.
I suggest getting that condo on the market as quickly as possible, because if you can’t float the double mortgages for a little while, it’s your best hope to sell fast.
Certain things have to be done first - such as driving our bunnies to New Hampshire. Pets aren’t allowed here so we really can’t show with them here.
Also, the living room floor badly needs a professional shampoo and the walls need to be painted. Until we do those things, we really can’t show this place.
What you mention is a good idea. I’ll have to ask about that.
I don’t know how tight things are, but you might explain the situation to a mortgage broker and arrange for a bridge loan; that is, an additional loan that would allow you to cover your current mortgage payment, and would expect the significant chunk of the down payment on the new home in X days, where X is around 180. That is, they’ll lend you money to buy your new home, and expect a large chunk of change after about 6 months, when you’ve sold your existing home. Mortgage brokers, dealing on a day to day basis with people’s intimate lives, are also willing to speak to someone who doesn’t own the home (the owner will need to sign all the documents).
Generally speaking, if your fiancee calls the customer service people and tells them they have permission to talk to you, the customer service people won’t have any problems with talking to you.
Make an offer on the house contigent on financing and selling your current home. As has been mentioned, it’s done all the time. The owner may reject the offer, but at least you’ve tried.
If you (the purchaser[s]) have good credit and are planning on making a down payment on the new place, then consider not making a down payment. Then you’ll have the funds to cover both mortgages for a while.
Can anyone tell me more details about bridge loans? I’m in the middle of a move, and it would definitely be useful to buy a house here before I’ve sold the one in New Hampster.
We’re in the middle of a bridge loan transaction at the moment. We’ll be closing on our new house in about a month. In our scenario, the bank is loaning us 95% of the new house. Obviously that means we’ve gotta come up with that other 5% on our own. We can either do that though our savings or by drawing from the home equity line on our current house.
Of the 95% that the bank is putting up, I’ve told them how much of that I want to be the ‘first mortgage’. After all of the transactions are done, this is the loan we’ll have for the rest of our natural lives. The remainder of the loan is just a home equity line on the new house. Once we sell our existing house, we can take the proceeds and do with them as we wish. My plan is to pay the bridge loan in it’s entirety, but if I don’t sell my current house for what I expect to, or if I just want to keep some cash on hand for upgrades to the new house, I don’t have to pay the bridge loan down to zero.
Though I expect my current house to move quickly, I have to be prepared for the possibility that I’ll be stuck with it for a while. During this period I would have two mortgage payments. Though if I was seriously in a pinch, I could just draw money out of my home equity line on the first house to cover the mortgage payment.
If you don’t have a home equity line of credit on your current place, get one.
Thanks everyone. While my name will again not be on the mortgage (my credit is not so great), my fiancee has immaculate credit and will have no trouble getting one on his own.
I’d prefer to rent but I’ve come to realize that renting in the area we’re moving to is just as if not more expensive than buying. We’ll never be able to save up to buy if we rent so we have to do it now - before we’re really ready.