How to Buy a House Before Selling Yours
You may be able to buy a house before selling your current home if you can fund the purchase and meet the lender’s requirements. Equity in the home you own can sometimes help, but each approach changes the costs, obligations, and timing.
Buying first can give you time to move and prepare the old house for sale. It can also leave you responsible for two properties longer than expected.
Can you use a HELOC or home equity loan?
If you qualify, a home equity loan or HELOC on your current home may provide funds for the next purchase while leaving the existing first mortgage in place. These are additional debts, with payments and fees that need to fit the plan.
Tell the lender whether your home is already listed and when you intend to sell. Ask whether those plans affect eligibility, closing, or repayment requirements.
How does a bridge loan help?
A bridge loan provides short-term financing to cover the gap between buying and selling. The sale proceeds may be the planned source of repayment, but the debt still has to be paid according to its terms if the sale is delayed.
Ask about the rate, fees, required payments, maturity date, and what happens if the property does not sell in time. Requirements depend on the financing program.
What about one loan covering both properties?
Some specialized loans use more than one property as security. Often described as blanket or cross-collateralized financing, these arrangements are not interchangeable with a standard purchase mortgage.
If a lender offers this structure for your situation, ask exactly what is secured and how the old property can be released when it sells. A release may require a specified principal payment or other conditions.
Can you buy first and recast later?
If you already have enough cash for the initial purchase, an eligible mortgage may allow a recast after your old home sells. You make a large principal payment, then request a recalculation of the required principal-and-interest payment over the remaining term.
The recast generally keeps the new loan’s rate and remaining term. It does not transfer the low rate from your old home. It also does not provide the down payment you needed to buy first.
Recasts are not automatic and are not available for every loan. Confirm eligibility, fees, minimum payments, and timing before relying on this option.
Can you comfortably carry the overlap?
Budget for both homes’ loan payments, taxes, insurance, utilities, and upkeep. Keep room for a delayed sale or a lower net sale amount than expected.
How the lender counts your current home’s payment depends on the program and documentation. Simply listing the house does not make the payment disappear.
If you are moving around Dayton or Cincinnati, The Jeff Probst Group can help plan the sale and purchase together. Start with a realistic sale estimate and timeline, then have your lender compare the financing against both an expected and a delayed closing.
